A B.C. Supreme Court Justice has upheld an order requiring a payday loan company with branches in Prince George and across northern B.C. to refund more than $1 million to its customers.
In a ruling issued this week, Justice Brenda Brown dismissed a petition from Cash Store Financial Services Inc. seeking to quash a compliance order issued by Consumer Protection B.C. to refund fees charged for cash cards.
Cash Store operates five branches in Prince George under The Cash Store and Instaloan brands, and 20 branches across northern B.C., including Dawson Creek, Fort St. John, Fort St. James, Williams Lake, Quesnel, Smithers, Terrace and Prince Rupert.
Exactly how many customers in this region stand to benefit is not known, but Consumer Protection B.C. corporation relations vice president Manjit Bains said the company issued about 68,000 loans across B.C. during the period in question, from Nov. 1, 2009 to March 23, 2012.
"Some consumers would have taken out multiple loans during that period of time and the charges that they were charging varied from location to location," Bains said.
"It could be anywhere from $7 up to $25 but when you start looking at multiple loans and you start looking at consumers who can barely make ends meet, and that's why they're borrowing money, any amount is a large amount at this point."
Cash Store has 30 days to file an appeal with the B.C. Court of Appeal but must immediately begin the process of refunding those fees.
Bains said Cash Store must advertise and "reach out" to customers to make sure they have the right addresses to mail the cheques to. That includes notices on The Cash Store and Instaloans websites with links from the Consumer Protection B.C. website as well.
"We are reviewing all of their communication, all of their advertising, to make sure it's going to be done properly," Bains said. "We're going to be working very closely to ensure all impacted consumers are paid."
The company will not be able to retain any of the unclaimed refunds.
"If they are not able to locate consumers, the money must be transferred to Consumer Protection B.C.," Bains said. "We will hold it in trust for six years trying to reach consumers as well, and then if unsuccessful, the courts ordered that the money can be transferred into a consumer education fund."
The provincial government introduced the payday loans regulations in November 2009 and a year later, Cash Store was ordered to stop charging the fees and refund the money that was collected.
Consumer Protection B.C., an industry-funded non-profit organization that enforces consumer protection laws in B.C., had found Cash Store was charging customers more than the maximum legal amount of $23 per $100 on payday loans by charging extra fees to issue loans on cash cards.
Court challenges and subsequent reviews followed, leading up to the decision issued Thursday. Cash Store was also assessed $27,500 in fines during the process.
