Unlicensed online payday lenders are operating in New Brunswick26 November 2018
SAINT JOHN (GNB) – 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 that some of the online businesses that are offering payday loans and are not licensed in New Brunswick (and some are not licensed in any Canadian province). These businesses include:
Consumers can check if a payday lender is licensed by contacting the Financial and Consumer Services Commission. The commission also has resources on its website to help consumers become educated on the importance of using licensed payday lenders, 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.26-11-18