Cash Store Financial Group, which operates Cash Stores and Instaloans in British Columbia, Canada, has been ordered to repay more than $1 million to B.C. customers after allegedly charging them exorbitant interest rates on payday loans and charging extra to load the loans onto debit cards.
Consumer Protection BC issued the order. The consumer watchdog found the company violated provincial law starting in 2009 by overcharging customers for payday loans by requiring customers to also pay for cash cards.
By law, the maximum lending rate in B.C. is $23 on $100, but customer were sometimes charged anywhere from $7 to $21 above that per loan, Consumer Protection BC found.
Consumer Protection B.C. had fought Cash Store Financial all the way to B.C. Supreme Court to force the company to pay back the money. Before the legal battle, Cash Store Financial was ordered to place $1 million into a trust account. It's that money that will be used to repay the overcharged customers.
If the company is unable to find all of the overcharged customers, Consumer Protection B.C. will take over the search. Cash Store Financial officials told CBC News on Friday it is disappointed with the decision and is considering its options. The payday lender has 30 days to appeal the ruling.