No It’s Not The Cold. Canada’s Payday Loan Industry is Shivering With Fear
I don’t care what people say about Canada and Canadians, the one thing I find quite impressive about the country and its people is the way they have tackled the payday loan problem. Here we are still confused about what the ‘exactly’ right course of action would be while the Canadians have gone right ahead and tried to work out solutions to their payday woes. A few months back, Manitoba’s provincial government introduced a legislation that would limit the amount of interest payday loan companies can charge.
And now, a Supreme Court judge recently ruled that a B.C. payday loan company was charging “criminal” rates of interest to clients borrowing to make it through to their next paycheck. This first class-action civil ruling is expected to create a ripple effect for the multi-million-dollar payday loan industry in the country. During the trial in April, the court heard that the payday loan company, A OK charges a 21 percent interest rate and a processing fee of $9.50 for every $50 borrowed. Justice Brenda Brown ruled the processing fees and late fees charged by the A OK Payday Loans Inc. were interest. Fftimes.com reports:
A OK denied the fees were a form of interest and argued the Criminal Code section that it was being applied was not aimed at businesses like theirs but for the loan-sharking industry.
Read more: Payday loan company charging ‘criminal’ interest rate: court