People who were overcharged for payday loans could be in line for a late Christmas present early in the new year.
Consumer Protection B.C. has ordered Cash Store Financial to begin the repayment of an estimated $1 million that was charged on as many as 68,000 payday loans. The repayment process is to begin today.
"The time has now come for Cash Store to reimburse consumers for illegal fees they have charged on payday loans," said Manjit Bains, vice-president of corporate relations for Consumer Protection B.C. "Right now our message is they need to start reimbursing consumers. They have waited long enough."
In March, Consumer Protection ordered Cash Store, which does business as The Cash Store or Instaloans and has five Victoria locations, to pay back customers for additional fees charged to issue loans via cash cards, dating back to 2009.
After a lengthy investigation, the watchdog found rather than cash, customers received the money in the form of a loaded cash card, for which they paid extra.
According to the organization, the practice meant the company was charging more than the maximum legal amount of $23 per $100 on the loans.
Cash Store Financial has maintained throughout the process use of the cash card, provided through a third-party financial institution, was strictly optional, and that it does not issue cash cards, but distributes them.
Calls to Cash Store Financial, to determine what their next step is, were not immediately returned Monday.
In April, Consumer Protection slapped the Edmonton-based payday loan firm with an extra $2,500 penalty for failing to comply with an order to pay an administrative penalty imposed at the end of March.
Consumer Protection took the step of filing a penalty and compliance order in B.C. Supreme Court after Cash Store failed to pay a $25,000 administrative penalty and $21,000 costs within 30 days of the issuing of the order.
Bains said the company has since paid more than $27,000 in administration fees and has exhausted the appeal process on its initial order. The company can, however, appeal the supplemental order, which when it was issued in late November outlined a more detailed process for it to follow.
The refund process will be overseen by an independent auditor and Consumer Protection B.C. Following from this process, it's expected that all illegally charged funds could begin to be refunded as soon as February.
Anyone who obtained a payday loan from The Cash Store or Instaloans between Nov. 1, 2009 and March 23, 2012, may be eligible for a refund. Each refund will require a claim form that will be available from Cash Store or Instaloan locations.
Any funds not claimed will be held by Consumer Protection B.C. for six years. Bains said so far they have heard from about 1,500 consumers who may be affected.
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