Increasingly pushed towards quick loans at usurious rates of 200%, Quebecers are left to their own devices in the face of everyday financiers. A major private lender has just received a slap on the wrist from the courts.
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The company, which operated under the name Prêt instant or Creditmatik or Prêt Express 911, said it lent at 29% interest, but instead applied a real rate of 157% to 228%, calculates the Consumer Protection Office (OPC ). The credit rate cannot exceed 60% under the Criminal Code of Canada.
The head office of Prêt Instant is located at 7750, boulevard Cousineau, in Longueuil. The company changed its name to Alterfina.
Photo Pierre-Paul Poulin
Prêt Instant thought about avoiding certain obligations of the Consumer Protection Act by offering variable credit contracts and not loan contracts.
The company charged membership and insurance fees, so much so that it could charge its customers more than $500 for a $250 loan.
The Superior Court condemned the company last October for 12 loans granted to consumers who were experiencing financial difficulties or who needed money quickly.
Photo Pierre-Paul Poulin
The sanction: $13,914 in fines for the company and $10,800 for its president, Nicolas St-Pierre. At the time of the events, the man was operating one of the largest private loan companies in Quebec with $30 million in active loans.
“It’s not enough of a deterrent. We need more sanctions, steeper fines,” laments the co-director of the Consumers’ Union, Maxime Dorais.
The organization has long known that the victims of these economic crimes are of no interest to the police. Lenders have free rein to take advantage of the vulnerability of Quebecers caught up in the cost of living.
“It’s a crime without violence, without death. But the victims are caught in a vicious spiral which can have serious consequences,” says Mr. Dorais.
The Consumers’ Union only asks to collaborate with the police forces so that “we can organize ourselves in Quebec” to put down what looks more and more like a far west.
“Disgusting”
“They take advantage of vulnerable people. It’s disgusting,” protests Josiane Lemire about private lenders. The 37-year-old Montrealer knows what she’s talking about: she has taken out at least 30 quick loans over time.
Struggling with a gambling problem, she hit rock bottom before getting out. Today, she pays her loans one by one and wants to testify in order to help people as much as to denounce those she calls “sharks”.
“There is one who asks me for $630 for a loan of $250, it’s nonsense,” says the beneficiary attendant. She is still surprised to have been able to obtain loans even though she was blowing everything in online casinos and her balance was at 0.
Prêt Instant is one of the 20 companies that Josiane Lemire found on Google during her descent into hell and which lent her money.
“There is only one company that treated me well, and it’s not this one,” says the woman who was addicted to online casinos.
She has a lot to say about the sometimes brutal collection methods of these companies or their tactics to encourage deeper debt.
“When you are on the penultimate payment, they offer you a new loan bigger than the first,” she gives as an example.
Prêt instant (9281-7378 Québec inc.) has been the subject of 18 complaints to the OPC over the past two years, including 10 for deceptive practices.
No more sanctions please
Quebec thought it had turned off the tap for these lenders in 2019 with its new law. But they have designed new contracts and are more popular than ever.
There were 147 authorized to make loans with interest rates of up to 35% in 2022, compared to 188 today.
The 10 investigators in the OPC have their hands full with them, but cannot do much without help from the authorities.
“We need more dissuasive sanctions,” repeats the Consumers’ Union, which is campaigning for a maximum interest rate of 30%.
Portrait of the industry
- 260 holders of money lender licenses.
- 188 merchant permit holders who enter into a high-cost credit contract.
- 16 criminal proceedings for two years against this type of trader, six of which are still before the courts.
- $98,959 imposed as fines in the 10 other cases.
The answer ofAlterfina
Prêt Instant no longer exists under this name. “Prêt Instant evolved into Alterfina to adapt to the market and develop its service offering,” responds the company. Nicolas St-Pierre “is no longer involved with Alterfina” since 2021, it is said. In recent years, Alterfina has reportedly “addressed concerns by improving its practices and services.”