News


ONTARIO PROPOSING CHANGES TO PAYDAY LOANS, DEBT COLLECTION

Province Introducing Legislation to Strengthen Consumer Financial Protection

NEWS                                                                                                    Friday, December 11, 2015

 

(Mississauga, ON) Ontario is introducing legislation to increase protections for consumers who use high-cost alternative financial services, such as payday loans, instalment loans, rent-to-own services and cheque-cashing services, and to better protect those with debts in collection.

 

If passed, the Alternative Financial Services Statute Law Amendment Act would make amendments to the Payday Loans Act, Consumer Protection Act and the Collection and Debt Settlement Services Act that would increase protections for consumers in several important new ways, for example:

  • Consumers cashing cheques at alternative financial service providers would have more information made available to them and would benefit from a cap on the rate of cheque-cashing services
  • Consumers using rent-to-own services would benefit from a grace period for repayment
  • Consumers using instalment loans would be certain that the costs of optional insurance would not be excessive
  • Consumers who are repeat payday loan borrowers would have the option of a longer repayment period
  • Consumers with debts in collections would benefit from debt collection rules that apply more broadly, including debt purchasers

 

Protecting Ontario’s consumers is part of the government's plan to build Ontario up. The four-part plan includes investing in people’s talents and skills, making the largest investment in public infrastructure in Ontario’s history, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.

 

QUOTES

“As we fight poverty in Ontario, we need to do more to protect vulnerable people from falling into poverty. Greater awareness by consumers of the costs of borrowing money and protection of consumers from unfair and exploitive business practices are important parts of our strategy to reduce poverty.”

— MPP Amrit Mangat, Mississauga-Brampton South

 

QUICK FACTS 

  • Alternative financial services are any financial service offered by a party other than a bank or a credit union.
  • There are over 800 licensed payday lenders and loan brokers in Ontario.
  • Ontario’s 2015 survey of 500 payday loan borrowers found that 18 per cent took out 10 or more payday loans in the last year and slightly more than half used payday loans to cover recurring expenses.
  • Approximately 1000 people provided input during the consultation process.

BACKGROUND INFORMATION

  • Strengthening Consumer Financial Protection

LEARN MORE

 

 

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CONTACT

 

MPP Amrit Mangat

Mississauga-Brampton South

(905) 696-0367

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