Cash Store Sentenced To Pay $ 1 Million For Illegal Payday Loans
The Cash Store, which also functions as Installers, was ordered to pay back over $ 1 million to clients in British Columbia who had to pay exorbitant interest rates on payday loans.
One of those clients was John Rahberger, a man on disability pension, who went to the Cash Store two years ago for a payday loan. Rahberger entered a vicious cycle of borrowing – two loans per month, every month.
“I was stuck. They got me on a barrel,” Rahberger said.
Now he and others like him who took out a total of 68,000 payday loans between November 2009 and March 2012, are for a refund.
I hope they realize that is enough and that they can’t do this to people anymore.– John Rahberger
Consumer Protection BC ordered the Cash Store to reimburse them $ 1 million. This is because BC regulations prohibit payday lenders from charging more than 23% interest per month.
Between November 2009 and March 2012, however, Cash Store Financial Group – which operates cash stores and Instaloans in British Columbia – was doing just that. He charged customers extra to load the loans onto debit cards, before cashing them out.
A CBC News survey at the time found a customer paying around 35 percent per month.
Consumer Protection BC fought the Cash Store all the way to the BC Supreme Court to force the company to refund the money.
The Cash Store has lost.
“Consumers have waited long enough, and it’s time for Cash Store to pay their money back,” said Manjit Bains of Consumer Protection BC
Before the legal battle, Cash Store Financial was ordered to put $ 1 million in a trust account. It is this money that will be used to reimburse overbilled customers.
If the Cash Store cannot find all overcharged customers, Consumer Protection BC will take over the search.
“We want the million dollars the store owes cash in the pockets of British Columbia consumers,” Bains said.
Rahberger said he was “ecstatic” at the result.
“It makes me feel a little justified, really,” he said.
“I hope they realize that is enough and that they can’t do this to people anymore.”
Cash Store told CBC News on Friday that it was disappointed with the decision and was considering its options. The payday lender has 30 days to appeal the decision.