Un­li­censed on­line pay­day lenders op­er­at­ing in New Brunswick

In­ap­pro­pri­ate col­lec­tion prac­tices be­ing re­ported

Sackville Tribune - - EXTRAS ONLINE -

Un­li­censed on­line pay­day lenders are tar­get­ing New Brunswick­ers, warns the Fi­nan­cial and Con­sumer Ser­vices Com­mis­sion.

The com­mis­sion has been re­ceiv­ing com­plaints from con­sumers about in­ap­pro­pri­ate col­lec­tion prac­tices by pay­day lend­ing busi­nesses not li­censed to op­er­ate in the prov­ince.

“We are hear­ing that these busi­nesses are con­tact­ing con­sumers who have fallen be­hind in their pay­ments at their place of em­ploy­ment and in some cases, threat­en­ing to seek re­pay­ment from their em­ployer. Some­times they are con­tact­ing them up to 50 times a day,” said Alaina Nicholson, di­rec­tor of con­sumer af­fairs at the com­mis­sion. “It is against the law for a pay­day lender in the prov­ince to con­tact you at your place of work, or to con­tact your em­ploy­ers or co­work­ers to col­lect a pay­day loan that is late.”

Since the im­ple­men­ta­tion of the Cost of Credit Dis­clo­sure and Pay­day Loans Act on Jan. 1, pay­day lenders in New Brunswick must be li­censed by the com­mis­sion.

Us­ing li­censed lenders helps pro­tect con­sumers from preda­tory lend­ing prac­tices. Some of these pro­tec­tions in­clude: in­ter­est rate caps, dis­clo­sure re­quire­ments and can­cel­la­tion op­tions.

Pay­day loans are high- cost loans. New Brunswick leg­is­la­tion caps the cost of a pay­day loan at $15 per $100 bor­rowed, which is the equiv­a­lent of 392 per cent in­ter­est. Con­sumers need to un­der­stand the cost of bor­row­ing be­fore agree­ing to a pay­day loan. It is also im­por­tant for them to con­sider all the op­tions avail­able to find the right so­lu­tion for their short-term bor­row­ing sit­u­a­tion.

Con­sumers are cau­tioned some on­line busi­nesses that are of­fer­ing pay­day loans are not li­censed in New Brunswick (and some are not li­censed in any Cana­dian prov­ince). These busi­nesses in­clude: true­pay­day­loan.ca, cash2­gonow. com, cash­buddy500.com, cash- flow500.ca, cash­flow500­pay­day. com, cred­it­mon­treal500. com, fast­money­loans. ca, na­tion­al­pay­day­loan. ca, pay­dayk­ing500. com, pret­so­hben.com, rapid­pay­day­loans. net, roy­al­fi­nances. ca, so­lu­tions500.com and speedy­pay­loans.ca.

Con­sumers can check if a pay­day lender is li­censed by con­tact­ing the Fi­nan­cial and Con­sumer Ser­vices Com­mis­sion (http://www. fcnb.ca/fcnb-con­tact.html). The com­mis­sion also has re­sources on its web­site to help con­sumers be­come ed­u­cated on the im­por­tance of us­ing li­censed pay­day lenders ( http:// www. fcnb. ca/ what- is- apay­day-loan.html), as well as help them un­der­stand their rights and re­spon­si­bil­i­ties when us­ing a pay­day lender.

The com­mis­sion has the man­date to pro­tect con­sumers and en­hance pub­lic con­fi­dence in the fi­nan­cial and con­sumer mar­ket­place through the pro­vi­sion of reg­u­la­tory and ed­u­ca­tional ser­vices. It is re­spon­si­ble for the ad­min­is­tra­tion and en­force­ment of pro­vin­cial leg­is­la­tion reg­u­lat­ing mort­gage bro­kers, pay­day lenders, real es­tate, se­cu­ri­ties, in­sur­ance, pen­sions, credit unions, trust and loan com­pa­nies, co-op­er­a­tives, and a wide range of other con­sumer leg­is­la­tion.

It is an in­de­pen­dent Crown cor­po­ra­tion funded by the reg­u­la­tory fees and as­sess­ments paid by the reg­u­lated sec­tors. Ed­u­ca­tional tools and re­sources are avail­able on­line at http://www.fcnb.ca/fi­nan­cial­con­sumer.html.

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