Payday Loan Company Settles Lawsuit
By Paul RizzoPayday Loan Writer
A settlement has received court approval in a class action lawsuit brought against the now defunct Internet-based payday loan company, Quik Payday Inc., and its US parent.
This class action was filed on behalf of everyone in Canada who took out a faxless payday advance from Quik Payday, from October 2, 2002 until February 11, 2005, when Quik Payday Inc. ceased carrying on business in Canada.
The claim alleges that Quik Payday, whose online payday loans were offered exclusively on the Internet, charged interest on its payday loans in excess of the maximum legal rate of 60% per year. Quick Payday charged a flat fee of $25.00 per $100.00 borrowed.
A rollover option was originally available for a further 4-18 day term, for an additional $25.00 per $100.00 borrowed. Moreover, Quick Payday charged a $20.00 late fee and interest at the purported rate of 25% per annum on overdue cash advance loans.
The claim alleges that all of these charges are “interest” as defined by the Criminal Code, and that the interest on all payday loans exceeds the maximum legal rate, and constitutes a criminal rate of interest. The Statement of Claim was issued on January 28, 2005.
The settlement calls for Quik Payday Inc. to pay all of its remaining assets into a settlement fund, which will be used to repay customers a portion of the interest and fees they paid at the time the payday loans were advanced.
Settlement funds will only be available to customers who did not default on the repayment of any of their loans with Quik Payday.
Quik Payday also agreed that it will take no collection action against any of its customers who defaulted on their payday loans.
