If you or someone you know takes out a payday loan, there is certain information that must be disclosed to you. We’re going to go over why these laws exist and why it matters to you.
We license and regulate payday lenders in the province. Some payday lenders sell insurance for payday loans. Under our laws, payday lenders cannot require or request that you purchase any goods/services related to your payday loan (in this case: insurance).
Here is a summary of section 19 of the Payday Loans Regulation:
Payday lenders MUST NOT:
- Make a payday loan dependent on the supply of other goods or services
- Offer an agreement that includes a term or condition relating to the supply of other goods or services
Payday lenders MUST:
- Include a statement in the agreement that clarifies that the supply of other goods or services is separate and optional
What does that mean?
In general terms, this means that the payday lender must make you aware that insurance is entirely optional and separate from the loan.
Why it matters
You’re clear on the facts.
Imagine if you bought a laptop and found out later that $300 worth of optional insurance was tacked on to your total bill without your knowledge. Chances are you might feel as though the business was not being honest with you. These laws exist so payday lenders are transparent and up front about insurance being entirely optional and separate purchase from the loan.
You don’t pay for more than you need to.
These laws exist so you don’t end up paying for a good/service that you don’t want or need.
You don’t feel pressured.
It’s important that lenders make it clear that insurance is not a requirement for taking out a payday loan. That way, you don’t feel as though you have no choice but to pay extra for the insurance to get your loan.
About Consumer Protection BC
We are responsible for regulating specific industries and certain consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we can’t help you directly, we will be happy to provide you with as much information as possible. Depending on your concern, another organization may be the ones to speak to; other times, court or legal assistance may be the best option. Explore our website at www.consumerprotectionbc.ca.
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