FINANCE. What do “ouiounon.com”, “Quick money.com”, “pretsurdemande.com” and “Gestion ODC” have in common? They are among the 14 companies in the Granby region to operate in the quick loan market. Organizations that offer “financial assistance” at interest rates that can exceed 150%, revealed a survey conducted by ACEF Montérégie-est. A practice denounced by the consumer rights organization.
Classifieds in newspapers, advertisements on the web, loans ranging between $ 300 and $ 1,500, no investigation, disbursement of funds in less than 24 hours. The fast lending sector is prolific, noted ACEF Montérégie-est during its survey carried out between January and April. It was following a dossier published in the Journal de Montréal last January that the organization decided to do its own research.
“Several businesses are linked to the same owner and this is perhaps why there are so many in Granby,” says Roger Lafrance, budget advisor at ACEF Montérégie-est.
“What shocks us a bit is that in 2018, the Quebec government amended the Consumer Protection Act precisely to counter these rapid loan companies, in particular by transforming all the costs associated with the contract into interest rates. interest. But our investigation allowed us to see that nothing has changed on the ground and that is what we denounce, ”adds the spokesperson for ACEF.
According to Mr. Lafrance, a consumer who takes out a loan of $ 500 will ultimately have to repay an amount of $ 775 within three months, or an annual interest rate of 223% when converting all credit charges in interest rate.
“These companies are getting around the law by claiming that they charge brokerage fees. In other cases, we transform loans into variable credits to bill legally since they have the right to impose membership and brokerage fees. ”
Remember that in Canada, the usurious rate is set at 60% per year ”, according to the Criminal Code. While at the Consumer Protection Office, an annual interest rate of 35% is deemed “abusive”.
“It is up to the Office de protection du consommateur to ensure that the law is applied. Otherwise, what is the point of adopting a law if it is not respected, ”declares the representative of ACEF Montérégie-est.
A call to banks and credit unions
Workers with bad credit, immigrants with no financial history in the country and clients across the province. The playing field is perfect for players involved in quick loans. Although they are legal, these companies exploit people’s vulnerability, believes Mr. Lafrance of ACEF Montérégie-est. According to our interlocutor, the banking sector must be one of the alternatives.
“Banks and credit unions are granting fewer and fewer small loans. Rather, we lead people to other forms of credit. For a certain segment of the population, they should have access to traditional credit and not to quick loans with interest rates of 150, 200% per year. “” We, what we are asking the Minister of Justice, Simon Jolin-Barrette, and the OPC, is to bring together the banks and credit unions to find a solution because we have a stratum of people who needs that kind of credit. ”
–
