Did you know that payday lending became regulated in 2009 in BC? So what does this actually mean?
All payday lenders require licences to conduct business in British Columbia and are expected to follow BC’s payday lending rules. If you are considering taking out a payday loan, you can confirm that the business is licensed using our licence search. There is a lot to know about payday loans but here are some basics.
What is a payday loan?
A payday loan is a small short term loan. Borrowers may not receive more than $1,500 and it must be repaid within 62 days of receiving it. Typically payday loans are paid back when the borrower receives a paycheque (usually within two weeks).
How much can I be charged for borrowing?
The most that can be charged for a payday loan is $15 for every $100. This means that in a typical case, a person borrowing $100 can expect to repay a maximum of $115 when their repayment is due. Different payday lenders may charge different amounts or different types of fees but the bottom line is that you should only be charged a maximum of $15 for every $100 you borrow, for all fees, no matter what.
ADDITIONAL READING:
What would you do? A guide to being a savvy consumer: payday loans
Helen’s story: knowing the payday lending rules pays off
Payday lending: changes to the cost of borrowing now in effect in BC
Is Mr.Payday loans licensed to do 1st party debt collection in Vancouver?!
Hi Dawn,
1st party creditors do not require a license for collections in BC. All 3rd party creditors however must require a license. Thanks for the question!
Michelle
How come the government is allowing this payloan business to charge the consumer for a maximum of 23% for 2 weeks or about 48% per month or about 600% interest per year. Where is the consumer protection in this issue? The government must protect the interest of the consumer not only the interest of the business people. People go to payloan store because they need money and this payloan business is taking advantage of it by charging them too much interest. Please do something…
Hi there,
Thanks for your comment. I can understand your concerns. Payday loans are only one source of financing available to consumers and there are other options which are less costly. 23% is the maximum lenders can charge and there are businesses which choose to charge a lesser amount. I realize that overall the interest rates are high, but the small amount of the loans and the short time periods involved lead to a higher rate than those found with conventional lenders.
Take care,
Michelle
If you do not like the fees do not use the service. I will change grocery stores if I do not like the prices I am being charged. In Canada you the have freedom to choose many different sources of food, clothing, vehicles AND lending outfits. To complain about a service that is helping you to get out of a situation that you probably got yourself into seems backwards. In my opinion.
I am one of the victim of Cash store and Instaloans, Ive been borrowing money since 2010, and everytime you reloan they always charge the monhtly fee for the freedom master card 40dollars plus loading fee of 10 dollars. Do you think I can have a refund I have still an outstanding, Im only paying partial amount and if I miss to pay they always PAD before you get paid which is stressful. I hope I can have a good refund for Ive been a customer for more than two years.
Hi Lilibeth. The Cash Store has been ordered to provide refunds as they have been found to be charging additional fees for the cash cards you speak of. The Cash Store has 90 days to provide refunds for consumers. In the meantime, we are collecting consumer information and requesting copies of contracts (if you have them). Please contact our inquiry unit with this information at info@consumerprotectionbc.ca.
I have been dealing with the cash store since 2010. I had fallen into it and I found it very hard to get out of with the limited income that I have. I had let the payments lapse for a few months, I wasn’t able to make them. They did not even send a notice out to me, but they did try to take out different amounts from my bank (5 times in one month). The NSF fees are $42.50 for each from my bank. I am trying to pay them back in installments. The cash store sure has not mentioned anything about refunds, I just found this out this evening.
Thank you for your comment. Our 2010 investigation concluded that Cash Store Financial was charging customers more than the maximum legal amount of $23 per $100 on payday loans by charging additional fees to issue loans on cash cards. As such, the refunds relate to the unlawful charging of fees related to cash cards. There is more information about our online refund tracking form on our website here: http://www.consumerprotectionbc.ca/consumers-payday-lending-home/refund-tracking-form
If you still have questions about what the refunds relate to or anything else, please contact us at 1-888-564-9963 or info@consumerprotectionbc.ca.
Can payday loans contact your employers and family if you have sent out letters indicating you cannot pay and to only communicate in writing?
I have a payday loan company owner coming to my place of employment and my home to ask for money on a debt I do owe on that is outstanding and have been paying off slowly what can I do to stop them from bothering me at work and home.
Hi Monica, thank you for leaving us a comment. Often payday lenders engage in debt collection activities. You may request the debt collection company to communicate with you only in writing. You may want to use our form online, here is the link: http://www.consumerprotectionbc.ca/get-started. Also you might find our another blog post helpful, there is a lot of information there around what debt collectors can and can’t do: http://bit.ly/1FFRCxr. If you still have concerns about the collection behaviour, please send us an email at info@consumerprotectionbc.ca with more details and we will see how we can help.
A loan company recently changed to prepaid cards instead of cash. With this, apparently, are new “fees” which make my payback more than 23%. Eg: I borrowed $380 (plus 23%=$467) but my payback was $495(ish) and the only way she could explain it was fees associated with their new card. Is this allowed? If not, what can I do? Please email me any advice. Thank you
Hi Cathy, thank you for your posting a question. It’s our understanding that a payday loan company is only allowed to charge $23 per $100 regardless of how the money is paid out. Please fill out our complaint form so we will be able to look into this. Our form is located here – http://bit.ly/29C7tzY
If you would like some help filling out the form, please feel free to contact us at toll-free 1-888-564-9963.
Hi Cheryl, thank you for your question. Can you give us a call toll-free at 1-888-564-9963 or email us at info@consumerprotectionbc.ca so we can get more details? From there, we will be able to tell if we would be able to look into this. Thank you, Cheryl!
So how does one go about getting a refund from an online payday loan company. CashOne has not only charged 543% they have repeatedly taken the payments out a day early causing me to incur NSF fees.