I’m not sure if this is the same class action lawsuit that I read about about from year ago, but I cannot say enough at how happy I am to hear that the British Columbian Courts are finely starting to take notice of this epidemic of Payday-Loans and Cheque Cashing outlets who are targeting low income wage earners and charging them criminal interest rates for their services. I have voiced my opinion several times here on my blog about this parasitical social problem that is infecting our communities, and each time I get upset when hear stories of people getting sucked in only because they are marginalized and our social standards say it is OK to fall into Bank traps.
The Criminal Code of Canada says that anyone who charges over 60 percent per annual is in violation of the Code.
347. (1) Despite any other Act of Parliament, every one who enters into an agreement or arrangement to receive interest at a criminal rate, or receives a payment or partial payment of interest at a criminal rate, is
(a) guilty of an indictable offence and liable to imprisonment for a term not exceeding five years; or
(b) guilty of an offence punishable on summary conviction and liable to a fine not exceeding $25,000 or to imprisonment for a term not exceeding six months or to both.
However, I have a sinking feeling that if the B.C. Judge does decide how (or whether) the victims should be compensated, they maybe victims again. Why? Well, money is not guaranteed by the courts to be recovered back to the victims. As the old saying goes, “you can’t squeeze blood from a stone.” I’m sure the two key players in the criminal charge have long since moved the money from the grip of the Court. Most business people who are involved in criminal actives usually “hide” or spend it before the Courts can recover it back to the victims.
Why do we allow these businesses to start up in the first place without any regulations or guidelines? I have seen people walk into these establishments with all the money they have earned, a few hundred dollars, only to have three to four percent skimmed off the top, then they roll it into a two week loan, with interest rates plus fees as high as 71 percent, just to get a hundred dollars extra to tie them over till the following pay period! When you are a low income earner, and rent is very high, what choice do you have? Do you think the government is going to help you out?
In early 2005, the Financial Consumer Agency of Canada placed questions on the Canadian Ipsos-Reid Express (CIRE) – a national omnibus poll of Canadian adults – about Canadians’ experiences with, and motivations for, using cheque-cashing and payday loan services.(4) The survey found that approximately 7% of survey respondents had used a cheque-cashing or payday loan company. Cheque cashing was the most frequently used service (57%), followed by payday loans (25%) and tax refund anticipation loans (5%). Library of Parliament.
I have also seen mothers with small children in tow, cashing their “B.C. Baby Bonus” cheques at these places, getting the same three percent skimmed off the top! I tried to tell one of the young women that I saw walking in the Pay day Loans Outlet that the Government cheque is guaranteed at any Charted Bank without any fees, but her distrusted towards them was enough that she was willing to take the three percent loss anyway just to convert the cheque into cash.
I see this type of “loan-sharking” as a moral degradation of our society. We need stronger laws to protect the low and middle income classes from these marginal types of people who think that business is business. They may think that people walk into their outlets voluntarily, but the sad reality is that, like legitimate Banks, there is always a “middle man” who will take a little off the top for their services. But if the charted banks don’t want you, where do you go? Do you have a choice?
VANCOUVER — A judge has concluded a B.C. payday loan company charged criminally high interest rates, but the people that filed the class-action lawsuit are a long way from knowing if they’ll get any money in compensation.
Justice Brenda Brown found that Instaloans Financial Solution Centres and its various related companies charged annual interest rates of over 60 per cent and that’s against the Canadian Criminal Code.
I am pleased that justice has made a decision against this murky industry. I wish the R.C.M.P. would have gone up to bat for these people instead of having to resort to a class action lawsuit. I want to see our government take action. The people should have at least one avenue where they can take their bank notes and convert them in to cash without having to endure to excessive service charges and interest rates. Regulation is the only answer. You can’t trust a Bank to do this voluntarily because greed it is just too inviting when involving money matters.