If you borrowed money from The Cash Store or Instaloans between before those companies declared insolvency, you may be eligible for a cash settlement as part of a $10-million class action lawsuit.
Jon Foreman, a partner with Harrison Pensa LLP, said there are 100,000 people who might be eligible for a minimum $50 award, and one-third of those people are in Northern Ontario.
The actions leading up to the lawsuit begin in 2011, when a borrower from the London, Ont., area took out a $400 loan. He repaid that loan nine days later, and it cost him $147 on top of the $400, Foreman said.
At the same time, the Ontario government started doling out regulatory actions against The Cash Store, laying charges and challenging the company’s business model. A new regulation was passed under the Payday Loans Act, , that made The Cash Store’s conduct very clearly offside, Foreman said.
We have the best information from those two companies regarding all of the borrowers eligible for a claim, including loan amounts, and we’ve spent the last six months organizing that for the website, so that it’s really an easy experience for the borrowers
Borrowers who took payday loans, including lines of credit, from The Cash Store and Instaloans will now be able to make a claim for a recovery of some of the fees and interest they were charged, following a decision by the Ontario Superior Court of Justice to approve a $10-million class action settlement.
There were five locations in Greater Sudbury at that time. Throughout Northern Ontario and south into Huntsville, Parry Sound, Midland and Barrie, for instance, there were as many as 26 stores, Foreman said.
On his best information, Foreman said there were 30,000 borrowers and 130,000 loans ranging from $100 to $1,500 in that timeframe.
“We believe there are 100,000 people in the class, and about one-third of them are in the North,” he said. “That’s why this is a very important region for us. We want to get their attention to get them to come forward and make a claim.
“We fought and scratched and sued people outside the insolvency, such as directors of the company, third-party lenders, and we were able to recover a $10 million settlement out of that mess. That’s a good result, although I wish we could have recovered more, but when you look at the circumstances, it’s a pretty good outcome.”
They have designed a distribution protocol, where borrowers of these two companies in that timeframe can visit . It will take five minutes, and it has everything they will need to file a claim.
Those eligible will be given an access code, which will bring up the information for the borrower, who can either agree with or disagree with the information. Depending on how much was borrowed, each person will get a pro-rated award out of the settlement, according to everyone’s relative weight.
“We put the $50 minimum out there, so people will say, ‘if I’m going to spend this time on the website, I want to get something out of it.”
On paign was officially launched in an effort to reach out to those borrowers
As part of the information turtned over by the settling companies, the firm was given contact information for those borrowers, but it’s information that could be outdated. People in view web site the region whose information Harrison Pensa LLP does have will be contacted either by mail, phone calls, text message or email.
“These are legitimate communications inviting you to participate in this process, so don’t regard them as spam or disregard them altogether. This is a court-approved process, and we’re using all the communication capabilities we have to reach out to people.”
In the four days since the campaign was launched, 10,000 people have come forward to either file a claim or inquire about a claim, Foreman said.
The deadline to make a claim is Oct. 31. Once received, the claims will be reviewed for accuracy, which takes time and requires careful work. Claimants will receive their cheques as soon as possible after the Claims Administrator has completed its review, likely in mid-2017.