If you have any questions with respect to the settlement you received, change of address, etc. you need to follow-up with the Cash Store directly.
Claim forms were required to be submitted as follows: By mail to: The Cash Store Financial P.O. Box 566 12222-137 Avenue Edmonton, Alberta T5L 4X5 or by Fax to: 1-780-452-4670
Each class member having submitted a valid claim will be paid his/her pro rata share of the settlement fund on the basis of the percentage that the brokerage fees charged to the class member are of the total amount of brokerage fees charged to all class members. Payments will be made half in cash and half by vouchers. Credit vouchers are fully transferable and have no expiry date.
It is expected that payment out to class members will take place within the next several months and no later than Fall, 2009.
The plaintiff, Thompson McCutcheon, commenced action under the Class Proceedings Act, 1992, on behalf of any person in Canada, resident outside the Provinces of British Columbia and Alberta, who borrowed money as a “payday loan” from a Cash Store location, and who repaid the loan and the standard broker fee charged by The Cash Store (% of the loan amount to ) on or after the due date of the loan.
Under the terms of the settlement, the defendants are to pay all customers of The Cash Store Inc. and Instaloans, outside British Columbia and Alberta, who were advance funds under a loan agreement and who repaid the payday loan plus the brokerage fee and interest in full (the “Class”), $1.5 million in cash and $1.5 million in credit vouchers, to be distributed pursuant to a Court approved Distribution Plan.
The defendants have also agreed that they will prepare and distribute to their customers through their retail locations, specific written credit counseling materials promoting responsible financial habits/practices. The defendants will spend at least $50, in connection with preparation and distribution of such materials.
Overview of Claim
A Statement of Claim was issued in the Ontario Superior Court of Justice on against The Cash Store Inc. and Rentcash Inc. alleging that interest and fees charged in respect of payday loans are illegal pursuant to the Criminal Code of Canada, that the cost of borrowing is excessive and that the transactions are harsh and unconscionable.
The action is brought under the Class Proceedings Act, 1992, on behalf of a Class consisting of any person in Canada, outside the Provinces of Alberta and British Columbia, who obtained a payday loan advances from the defendants and who were charged the defendants standard broker’s fees (% if the principal amount of the loan up to ).
The Statement of Claim alleges that the defendants own and operate 101 Cash Stores across Canada with locations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador.
Payday loans are generally for a short period of no more than 14 days and are usually due and payable on the next scheduled payday of the customer.
Interest is charged on all loans at an effective annual rate of interest of 59%, exclusive of all other charges. In addition to payment of interest, however, customers are also charged a “broker’s fee” of approximately 22.5% of the amount of the loan advance, which fee is a lump sum charge levied at the time of the loan transaction.
When combined with the annual cash advance in Tennessee rate of interest of 59%, the broker’s fee increases the cost of borrowing to in excess of 1200% on loans of 7 days, more than 600% on loans of 14 days and more than 300% on loans of 30 days, without any compounding.
The Statement of Claim alleges contravention of the Criminal Code of Canada in that the amounts charged, collected and received by the defendants constitutes criminal interest which exceeds 60%, the maximum interest rate allowed by law.
The Statement of Claim also alleges that the cost of the loans is excessive and that the transactions are harsh and unconscionable. A request is made that all customers are entitled to repayment to the extent of any excess paid or charged.
The action also alleges a breach of the provisions of the Consumer Protection Act. The claim alleges that the defendants have failed to properly disclose the cost of borrowing in respect of the said payday loans.
Any person in Canada, resident outside the Provinces of British Columbia and Alberta, who borrowed money as a ‘payday loan’ from a Cash Store location, and who repaid the loan and the standard broker fee charged by the Cash Store (% of the loan amount to ount after ) on or after the due date of the loan.
The Cash Store Inc. has served a Notice of Motion for Leave to Appeal the Decision of The Honourable Mr. Justice Cullity. The Appeal had been scheduled to be heard in Fall, 2006, but has been adjourned a number of times and has not yet been heard.