Suit against money lenders settled

Barb
Barb Sweet
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FINANCE/LEGAL

A class-action lawsuit involving money lenders who give payday advances has been settled for $5 million.

The lawsuit against Money Mart, Dollar Financial Group Inc. and several named directors who give fast-cash advance loans repaid by personal cheque was settled in this province and two others.

It was alleged the companies were charging higher interest rates than are permitted under the Criminal Code of Canada, although that has not been proven in court.

A class-action lawsuit involving money lenders who give payday advances has been settled for $5 million.

The lawsuit against Money Mart, Dollar Financial Group Inc. and several named directors who give fast-cash advance loans repaid by personal cheque was settled in this province and two others.

It was alleged the companies were charging higher interest rates than are permitted under the Criminal Code of Canada, although that has not been proven in court.

Customers in Newfoundland and Labrador between January 1997 to March 31 this year will be eligible for a share of the settlement, which is in the form of debt forgiveness, credits to customers for future business and cash.

The settlement must be app-roved by courts in Newfoundland, Nova Scotia and New Brunswick in a joint hearing set for May 26, St. John's lawyer Ches Crosbie said Tuesday.

It affects 7,300 customers in this province and 31,000 in total.

Ches Crosbie Barristers is one of three firms representing the customers. The other firms are Wagners of Halifax, N. S., and Crocco Hunter of Woodstock, N.B.

Newfoundland and Labrador has no regulation of payday loan practices.

"I am pleased that the defendants have agreed to abide by the Nova Scotia regulatory regime on a voluntary basis," Crosbie said.

The breakdown of the settlement is $650,000 cash, $3.3 million credits and $1 million debt forgiveness.

Crosbie said the problem with the lawsuit for local customers was that they had signed contracts for their loans agreeing to arbitration, effectively waiving their right to sue.

But case law has since changed.

"To wrest a settlement is an accomplishment by itself," Crosbie said, adding the fact that Money Mart agreed to follow Nova Scotia regulations was more than the provincial government has been able to achieve in dealing with the fast-loan companies.

The province has indicated it is looking into regulations.

About a third of the customers in the class action will see debts forgiven because they are not in good standing with the company. The rest will see a combination of cash and credits.

Lawsuits are ongoing against other companies such as Payday Plus and Quik Cash Ltd. and are not included in the settlement.

The lawyers are seeking approval of $600,000 in fees and other costs.

bsweet@thetelegram.com

Organizations: Money Mart, Dollar Financial Group Inc., Payday Plus and Quik Cash

Geographic location: Newfoundland and Labrador, Nova Scotia, Canada New Brunswick St. John's Halifax Woodstock

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Recent comments

  • anne
    July 02, 2010 - 13:17

    its time someone reigned these parasites in. if im not mistaken, there is a similar situation existing with the rent to own companies(i.e. Easy Home as recently reported on CBC Marketplace) br br as much as 500% interest! br br ironically, the victims are mainly low income who cant afford to lay down a large sum , and also fixed incomers who just cant stretch another week and end up sacrificing large amts of soon-to-arrive cheques just to buy groceries or pay utilities or rent on time. br br corporations like this are stealing from the poor who are vulnerable and sometimes desperate br br thank you Mr. Crosbie!

  • anne
    July 02, 2010 - 13:11

    its time someone reigned these parasites in. if im not mistaken, there is a similar situation existing with the rent to own companies(i.e. Easy Home as recently reported on CBC Marketplace)

    as much as 500% interest!

    ironically, the victims are mainly low income who cant afford to lay down a large sum , and also fixed incomers who just cant stretch another week and end up sacrificing large amts of soon-to-arrive cheques just to buy groceries or pay utilities or rent on time.

    corporations like this are stealing from the poor who are vulnerable and sometimes desperate

    thank you Mr. Crosbie!

    (note: as i type this comment I notice TWO ads in front of me on this page for 'fast and instant payday loans - cincidence?)

  • Neil
    July 02, 2010 - 13:11

    First $5m made in the erpr settlement and now another $200k or so in this one. Mr. Crosbie is going to have some retirement....Imagine if he could have got that class action against the tobacco co's going....money grabbers, all those lawyers....all of them.

  • anne
    July 01, 2010 - 19:58

    its time someone reigned these parasites in. if im not mistaken, there is a similar situation existing with the rent to own companies(i.e. Easy Home as recently reported on CBC Marketplace) br br as much as 500% interest! br br ironically, the victims are mainly low income who cant afford to lay down a large sum , and also fixed incomers who just cant stretch another week and end up sacrificing large amts of soon-to-arrive cheques just to buy groceries or pay utilities or rent on time. br br corporations like this are stealing from the poor who are vulnerable and sometimes desperate br br thank you Mr. Crosbie!

  • anne
    July 01, 2010 - 19:48

    its time someone reigned these parasites in. if im not mistaken, there is a similar situation existing with the rent to own companies(i.e. Easy Home as recently reported on CBC Marketplace)

    as much as 500% interest!

    ironically, the victims are mainly low income who cant afford to lay down a large sum , and also fixed incomers who just cant stretch another week and end up sacrificing large amts of soon-to-arrive cheques just to buy groceries or pay utilities or rent on time.

    corporations like this are stealing from the poor who are vulnerable and sometimes desperate

    thank you Mr. Crosbie!

    (note: as i type this comment I notice TWO ads in front of me on this page for 'fast and instant payday loans - cincidence?)

  • Neil
    July 01, 2010 - 19:47

    First $5m made in the erpr settlement and now another $200k or so in this one. Mr. Crosbie is going to have some retirement....Imagine if he could have got that class action against the tobacco co's going....money grabbers, all those lawyers....all of them.