The penalty that may be charged, required or accepted in relation to any default by a borrower under a payday loan is a penalty of 2.5% of the amount in default, calculated monthly and not to be compounded for the purpose of subsection 153(1) of the Act. This penalty might be charged, needed or accepted only one time in a 30-day duration. S. 15.4(1) Reg 50/2010
Despite subsection (1), a payday lender must not charge, require or accept any penalty or any other quantity in terms of a standard by way of a debtor under an upgraded loan. S. 15.4(2) Reg 50/2010
The amount of that fee by way of reimbursement, to a maximum of $20.00 in addition to any penalty that may be charged under section 15.4(1) of the Regulation, if a payday lender is charged a fee for a cheque, pre-authorized debit or other negotiable instrument that is dishonoured or if a stop payment order is placed, the payday lender may charge the borrower. S. 15.5 and 15.7(1)(2) Reg 50/2010
Non-compliance with this specific part may bring about notice of an administrative penalty. A summary of given administrative charges will be posted regarding the customer Protection workplace web site.
To learn more regarding administrative charges refer to matter 38 with this document.
Which are the effects if I charge significantly more than the amount that is allowable a debtor in standard?
In case a payday lender costs a debtor a lot more than the allowable quantity as allowed by regulation
- A borrower is certainly not accountable for any quantity charged in terms of his / her standard underneath the pay day loan; and
- The lender must reimburse the borrower immediately, in money, upon need by the debtor or the manager, for almost any quantity compensated by the debtor according of this standard. Continue reading