Posts Tagged ‘Cash cards’

Canadian Cash Store Denies Unfair Lending-Practice Allegations

May 22nd, 2011

Says “we have resolved all customer complaints”
Reacting to an order against Cash Store Financial Services Inc. of Edmonton, Canada, Cash Store Financial’s senior vice-president and corporate secretary Michael Thompson said, “We are surprised by the Alberta government allegations that we are engaging in unfair lending practices.”

Prepaid cash card
Service Alberta issued a director’s order against the Edmonton-based lender to stop alleged practices such as charging consumers extra fees to obtain their payday loan in the form of a prepaid cash card, the government announced on Wednesday. The order is an interim measure while the province determines whether to take further action.

Customer complaints
Thompson said, “Our records indicate that we have satisfactorily addressed all consumer complaints brought to our attention by Service Alberta. We are not aware of any outstanding or unresolved complaints at this time. We learned of the unfair lending allegations only when we received the order. Our records indicate that the specific allegations and evidence referenced in the order have not been presented to us for review, consideration or response.”

Purchase cash cards
The ministry said it received several complaints from customers who were told they had to purchase cash cards to obtain their loans immediately or wait up to 10 days for a check. Those who cancelled the loans within a two-day cooling-off period were allegedly told they still had to pay the fees for the card. It was also alleged the company refused to pay back the balance on the card if it was less than $25.

Leaders in consumer protection.
In response to the allegations, Cash Store said it has been a leader in consumer protection. “We were one of the first companies in Canada to eliminate rollovers on a voluntary basis and we have been actively involved in encouraging all provincial governments to implement effective measures to protect consumers.” Rollovers refer to renewing or extending payday loans. “We are most interested in the allegations that the company required customers to purchase ancillary services, such as a prepaid cash card, as a condition for receiving a loan.”

Company policy
“Company policy is to provide customers with the ability to immediately receive proceeds of their loan by way of a check. Customers can and do receive loan proceeds, in branch, immediately upon request. Loans are not contingent on buying another product or service, including cash cards. We will investigate if we receive documentation about the cases which prompted the allegations.

Copies of complaints
“It is typical for regulators to provide the companies that they regulate with copies of complaints or inspection reports so that the company can review its records to determine the accuracy of allegations,” Thompson said. “We have received nothing.”
Thompson added, “If incidents of staff breaking corporate policy are proven, we will take ‘swift and appropriate action to correct the situation’.”

Provincial order
According to Cash Store, the provincial order includes directives for Cash Store to stop charging fees that exceed 23 per cent of the principal amount of the payday loan and stop requiring consumers to purchase cash cards as a condition of receiving a loan. Cash Store must also allow consumers to cancel a payday loan and all required fees associated with the loan.

Canada
Cash Store Financial operates more than 573 branches across Canada.

Tags: Cash cards, Consumer complaints, Prepaid cash cards
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