Wear seems alive and well


When did it become okay to take it out on unlucky people?

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I received a direct mail last week for a service claiming to provide “affordable loan solutions”. He said I could apply easily at the branch, online or over the phone. I could get a loan of $ 5,500 – today. I have read the terms on the back, and nowhere does it mention the interest rate for this “affordable” solution that “has helped millions of Canadians like you for over 95 years.”


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The website showed the possibility of getting a loan between $ 500 and $ 35,000, but it took some time to find the interest rate. For a secured personal loan, the interest rate varies between 19.99% and 23.99%. (I would put an exclamation mark after that… but wait.) Unsecured loans have interest rates from 26.99% to 39.99%! (I should probably include a second exclamation point, but I know my editor doesn’t like them too much – in which case I think it will agree that an exclamation mark is justified.)

Their marketing is called “Canada’s leading non-bank provider of responsible lending solutions.” How is this responsible? How can anyone ever get out of the financial situation that necessitated one of these loans with these interest rates?

How is it not wear and tear?

The definition of usury, according to Investopedia.com, is “the act of lending money at an interest rate considered unreasonably high or above the rate permitted by law.”

Looking at a few legal websites, it appears that usury is not illegal in Canada until the company charges over 60 percent. This is in accordance with section 347 of the Criminal Code of Canada.

As I continued to read I had to take a break. I thought I was outraged by the loan rates, until I read about payday loan companies and their exemption in Canada.

Hoyes.com (a law firm) states that: “In 2007, section 347.1 was added to the Criminal Code, which exempted payday loans from section 347. Instead, the power to regulate loans payroll has been allocated to the provinces.


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The blog adds that in Ontario, the Ontario Payday Loans Act allows a fee of $ 15 for every $ 100 borrowed. Be clear, however, that it’s not $ 15 per year, it’s $ 15 for a two week period… which equates to an annual interest rate of 390 percent !! (Yes, I do, two exclamation marks.) Still, the default fees aren’t included here. If you miss a payment, your interest rate would be even higher.

Granted, payday loans are meant to be short term, but the annualized rate is what it is, and most people don’t just take $ 100 on a payday loan.

Whether it’s a payday loan or an “affordable loan solution” like the one that was sent to me in the mail, I have to ask: when did it become okay to take it out on? people who are unlucky? When did it become okay to stand on your back so that it is almost impossible to get up? How can anyone ever get stuck in their proverbial knees at these rates? When did the loan sharking business become legitimized and did it have storefronts in every city?

Various religions called for a death penalty for usury. I’m not saying that’s the answer here, but if a company is judged on how it treats its most vulnerable, we’re not even close to ethics here.

Nadine Robinson’s column appears every other Wednesday. She is a member of the Travel Media Association of Canada and the Professional Writers’ Association of Canada. She can be contacted at [email protected]



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