Class-action suit filed against payday loan company

Do you Pay Day?

CALGARY - A Calgary lawyer has launched a class-action lawsuit against a payday loan company, alleging that the industry gives loans with interest rates and fees that equate to 15,000 per cent a year. Bill McNally filed the lawsuit accusing the Alberta company of disguising interest rates so people don't realize how much they're actually paying for short-term loans. "These companies really exploit people who are vulnerable, who don't have the necessary economic capacity to pay their bills on an ongoing basis and are therefore at the mercy of very exploitive lending practices," McNally said. The lead plaintiff in the suit, Jacob Ayrton, said he could never get a loan from his bank when he was short on cash, so he borrowed $500 from a payday loan store. He paid it back two weeks later – along with $11 in interest and $95 in brokerage fees. The company said it makes customers fully aware of what they'll have to pay. Under the Criminal Code, companies can charge an annual interest rate of up to 60 per cent.

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