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Have your Say: Government of Alberta’s Proposed Consumer Protections

The Government of Alberta is looking for ways to better protect Alberta’s consumers—like you and I—and is needs your input! They recently launched a consumer protection survey to collect feedback on 14 different consumer issues, including:

  • A consumer bill of rights
  • Door-to-door sales
  • The automotive sector
  • Household moving
  • Ticket sales
  • Gift cards
  • Truth in pricing
  • Veterinary billing
  • Fairness between consumers and businesses
  • Cancellation rights
  • Talent agencies
  • Warranties
  • Reward points
  • Debt collection, and
  • High cost credit

If you’ve had, or know some who’s had, negative experiences in any of these areas—or even if you have opinions based on news reports—this is a great way to have your voice heard. You can answer questions on one, a few or all issues: it’s up to you!
If you’re one of our readers who is equally passionate about putting an end to the harmful practices of high cost lenders, this is a great opportunity to give your input on further protections. Further protections for payday loan consumers that Momentum recommends include:

  1. License all businesses that provide high-cost credit services, and use revenue from licensing to create a provincial Financial Empowerment Fund
    Licensing would enable the province to investigate lenders, enforce rules and obtain better data about the industry. Revenue generated through licensing fees could be invested in a Financial Empowerment Fund, which would support programs and services such as financial counseling.
  2. Mandate a standardized Financial Facts Label
    By mandating the inclusion of a Financial Facts Label (essentially a box that displays financial information about a credit product in the same way that nutritional labels list information about our food) on the front page of all credit contracts and in advertising, the Government of Alberta can support consumers in comparing credit products and in making informed decisions.
  3. Require lenders to assess a borrower’s ability to repay
    When determining the amount and term of the loan, responsible lenders consider if and how the borrowers will be able to pay it off. Lenders should take each borrower’s circumstances into account when determining the size of a loan, including income, debt and expenses.
  4. Reduce the cost of cheque cashing
    In Alberta, the cost to cash a cheque can be as high as $3.50 plus 3.5% of the cheque (or $60 to cash a monthly AISH cheque). The Government of Alberta should place a limit on allowable fees for cheque cashing.
  5. Introduce price caps for rent-to-own contracts
    Rent-to-own stores routinely lend above standard retail prices, sometimes by as much as four times. For example, to gain ownership of a fridge through a rent-to-own store costs three times as much as purchasing the same fridge at Home Depot.
  6. Require reinstatement rights in rent-to-own and title loan contracts
    In the case of title loans and rent-to-own financing, borrowers face the possibility of losing an asset in which they have invested if they miss a payment. Reinstatement rights allow borrowers to reinstate a contract by remitting payments that are past due, and by paying late fees.
  7. Prohibit solicitation of additional loans and refinancing options
    It is well documented that payday lending and installment lending profit from repeat customers and can therefore be aggressive about bringing people back to borrow more.

If providing feedback in person is more your style, you can attend an upcoming Open House in your area.
Do you have questions or comments about Momentum’s recommendations for further changes to policy around high cost lenders? Let us know in the comments.