Judge Permits Canadian Payday Advance Loan Suit
By Paul RizzoPayday Loan Writer
An Ontario judge has certified a class-action lawsuit against payday loan companies that claims their rates are excessive.
The suit seeks $515 million from Money Mart and its parent, Dollar Financial Group.
The plaintiffs argue that short-term payday loans end up costing borrowers interest rates that are criminally high.
The action alleges that Dollar Financial and Money Mart “conspired, among other things, to unlawfully cause the plaintiffs to pay interest at a criminal rate.” None of the claims have been proven in court.
The plaintiffs’ lawyer, Harvey Strosberg, says he’s “delighted” the suit can proceed and says he hopes to get it to trial as quickly as possible in order to prove how unlawful cash loans can be in the country.
The class action was started by Margaret Smith of Windsor, Ont., on Dec. 23, 2003. The lawsuit is going ahead in the absence of legislation to make payday loans legal.
A bill is going through the parliamentary system right now for just such a purpose , but no payday cash advance law exists yet.
A spokesman for the Canadian Payday Loan Association said from Ottawa that the umbrella group representing the industry will not comment on the lawsuit.
