Edmonton, Canada: (Apr-22-08) A class action lawsuit was brought against The Cash Store Financial Services Inc., formerly known as Rentcash Inc., alleging it overcharged brokerage fees and interest to customers of The Cash Store and Instaloans. The class action lawsuit claimed that the brokerage fees, in combination with interest charged by defendants on their customer loans, were over the limit prescribed by the Criminal Code of Canada. In a recent announcement, company officials stated that the company has reached a settlement in the case filed in 2004, in which it agreed to pay a restitution of brokerage fees and interest charged to customers. Officials said that the settlement is conditional on the terms of the settlement being approved by the court.
Under the terms of the agreement, Cash Store Financial is to pay, an aggregate of $1.5 million in cash and $1.5 million in credit vouchers to those customers of The Cash Store and Instaloans, who were advanced funds under a loan agreement and who repaid the payday loan plus the brokerage fees and interest in full. The effected customers are said to be outside of Alberta and British Columbia. As per the terms of the settlement, the credit vouchers may be used to pay existing outstanding brokerage fees and interest or to pay brokerage fees and interest which may arise in the future through new loans advanced to the customer. The company said that the credit vouchers are fully transferable and have no expiration date. Additionally, the company also agreed to pay the legal fees and costs of the class. [
