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| GENERAL |
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| Q: | What is a class action? |
| A: | A class action is a lawsuit in which the claims of many people having a common interest are sought to be decided in a single court proceeding brought by one of more persons as representative plaintiff(s). |
| Q: | Can you explain this class action to me? |
| A: | The lawsuit was started in 2003. It claims that interest and other fees charged by Money Mart on payday loans or fast cash advances obtained from its stores in Ontario which were repaid by cheque exceed the 60 percent maximum effective annual interest rate set in the Criminal Code and are therefore illegal charges. Money Mart defended the action, asserting that its business model operated within the rules and counterclaimed seeking the repayment of debts owed to it by its customers. |
| Q: | What is the status of the class action? |
| A: | The court decided the lawsuit was appropriate to proceed as a class action and certified it as a class action in 2007. The trial of the common issues started on April 27, 2009. During the month or so the parties were at trial, a mediation was held. With the help of a mediator, a proposed settlement was reached, but it required court approval for it to come into effect. In the meantime, Justice Spies adjourned the trial. The settlement was approved by Justice Perell on March 3, 2010. |
| Q: | Has the court decided whether or not Money Mart's payday loan/fast cash advance business model was improper? |
| A: | Because the trial was not completed, Justice Spies did not decide whether Money Mart's payday loan/fast cash advance business model was or was not improper. The settlement was made without any admission of wrongdoing by Money Mart and its parent corporation Dollar Financial. |
| Q: | What about payday loans/fast cash advances made after the settlement period? |
| A: | In 2006, the Criminal Code was amended to allow Provinces to regulate the payday loan industry. Ontario payday loan legislation providing stronger consumer protection is now law. Money Mart's business model for payday loans/fast cash advances has changed as a result of the requirements of the new legislation. |
| Q: | Why was the class action settled? |
| A: | The class action was hard fought from its inception in 2003. At the trial, it became clear to the parties that settlement would eliminate the risks of potential adverse outcomes for all involved. As a result of a mediation with a former judge of the Supreme Court of Canada, the Honourable Frank Iacobucci, a proposed settlement was obtained which has now been approved by the court. Both sides believe this settlement is fair and reasonable considering all of the risks. |
| Q: | Who is included in the settlement? |
| A: | Anyone who obtained a payday loan/fast cash advance at any Money Mart location in Ontario between August 19, 1997 and December 15, 2009 and repaid it by cheque that was honoured by the bank is a member of the settlement class. |
| Q: | If I repaid all of my payday loans/fast cash advances with cash on or before the due date instead of by cheque, am I a settlement class member? |
| A: | No. Anyone who repaid all of their payday loans/fast cash advances made with Money Mart by cash is not a settlement class member because the interest charged on payday loans/fast cash advances repaid in cash on or before the due date was at a rate less than the 60 percent maximum annual interest rate set in the Criminal Code. |
| Q: | Do I have to sign up to be included in the settlement class? |
| A: | No, you do not need to sign up to be a member of the settlement class. Money Mart has records of its customers and their payday loan/fast cash advance transactions. The settlement provides a dispute mechanism to address any discrepancy with Money Mart's records. There will be information on this website on how to obtain your share of benefits. |
| Q: | What if I do not want to be included as a member of the settlement class? |
| A: | The court will give customers who took out their first payday loan/fast cash advance repaid by cheque after September 9, 2007 a deadline by which they can write and exclude themselves (opt-out) from the class action if they so desire. The deadline to opt-out of the class action has already passed for those who obtained payday loans/fast cash advances repaid by cheque before September 10, 2007. However, if such a class member moved out of Ontario before September 10, 2007, he or she will be given a further opportunity to opt out. |
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| SETTLEMENT |
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| Q: | What benefits are available under the settlement? |
| A: | Money Mart will pay settlement benefits of over $120 million available in full and final settlement of all claims of the settlement class members on the following basis:
(a) $13 million in cash to be distributed to class members;
(b) $14.5 million to pay class counsels' fees, disbursements and taxes. This component of the settlement is subject to an appeal and the appeal period has not expired;
(c) the release of all debts owed by settlement class members to Money Mart on April 30, 2009 that were still outstanding December 31, 2009. The amount of these debts is $56,388,071;
(d) $30 million in transferable transaction credits, allocated on a pro rated basis to each settlement class member who does not have his/her debt to Money Mart forgiven. These transaction credits can be used for certain Money Mart products in all corporate and franchise stores in Canada, except stores located in the Province of Quebec, or they may be transferred or sold to other individuals;
(e) payment of the levy of the Class Proceedings Fund, on the transaction credits of $3 million; and
(f) administrative costs estimated to be $2 million. |
| Q: | What happens to any debt that I owed to Money Mart on April 30, 2009 that was still outstanding on December 31, 2009? |
| A: | If you did not pay off your outstanding debt to Money Mart that was incurred by April 30, 2009, you will be released, that is, your debt will be forgiven. Any settlement class member who receives the benefit of this forgiveness of debt will not receive any transaction credits under the settlement. |
| Q: | Am I entitled to transaction credits if I owed a debt to Money Mart on April 30, 2009 that was still outstanding on December 31, 2009? |
| A: | Only those settlement class members who don't have debts owed to Money Mart forgiven as a term of the settlement will be eligible to receive a share of the $30 million in transaction credits to be distributed pro rata to settlement class members. So, if you owed a debt to Money Mart that was outstanding on April 30, 2009 which is forgiven as a result of the settlement, you will not receive a pro rata share of the $30 million in transaction credits. The amount of the pro rata transaction credits a settlement class member who does not have debt to Money Mart forgiven as a term of the settlement will receive will depend upon the fees paid on his/her payday loan/fast cash advance transactions repaid by cash compared to the fees paid by all settlement class members eligible for transaction credits on all their payday loan/fast cash advance transactions repaid by cheque. |
| Q: | How will the $30 million in transferable transaction credits be divided? |
| A: | The $30 million in transferable transaction credits will be allocated among the settlement class members who do not have their debts owed to Money Mart forgiven under the settlement. Each settlement class member who does not have a debt owed to Money Mart forgiven under the settlement will be allocated the greater of $25 in transaction credits or his or her pro rata share of $30 million in transaction credits calculated on the total of his/her cheque cashing fees on payday loan/fast cash advance transactions repaid by cheque compared to the total cheque cashing fees paid by all settlement class members eligible for transaction credits for all their payday loan/fast cash advance transactions repaid by cheque. |
| Q: | How can the transaction credits be used? |
| A: | Fully transferable transaction credits will be issued in $5 increments and will expire four years after the date that the settlement becomes final. They will be usable in all Money Mart locations across Canada, except stores located in the province of Quebec, for all Money Mart transactions except wire transfers, foreign exchange and money orders in that four year period. A single $5 transaction credit may be used per transaction, except for income tax preparation services, in which five $5 transaction credits or $25 may be used.
A settlement class member may use his/her transaction credits for eligible Money Mart services in that four year period or sell or transfer them to other persons. After the four year period, any unused transaction credits will be applied for the benefit of Money Mart customers as a credit against Money Mart's usual and ordinary rate for a payday loan/fast cash advance, in an amount and manner to be determined by the court, until the remaining credits are all used up.
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| Q: | How will the cash available for distribution to class members be divided? |
| A: | The cash available for distribution to those settlement class members who don't have their debts forgiven will be allocated pro rata based on the total of the person's cheque cashing fees on payday loan/fast cash advance transactions repaid by cheque compared to the total cheque cashing fees paid by all settlement class members eligible for cash credits on all their payday loan/fast cash advance transactions repaid by cheque, provided that his or her pro rata share as calculated is equal to or exceeds $10. If his or her pro rata share is less than $10, no cash payment will be made. Any cash credits allocated to settlement class members will be paid on or after July 5, 2011.At the end of the four year period, Money Mart will pay any unpaid and/or unallocated cash credits and all accrued interest thereon to the Law Foundation of Ontario to fund grants in support of access to justice in Ontario. |
| Q: | How much will the lawyers be paid? |
| A: | The court decided that the lawyers should be paid $14.5 million for fees, disbursements and taxes from the cash component of the settlement. This decision is subject to an appeal to the Court of Appeal and the appeal period has not expired. |
| Q: | Do I have to pay legal fees? |
| A: | No, the legal fees will be paid directly from the cash component of the settlement. You will not pay any additional fees to the lawyers. |
| Q: | Do I have to do something to participate in the settlement? |
| A: | No. Money Mart's internal records will be used as the primary source to determine who is eligible for a release of debt or for transaction credits and/or cash credits. The settlement provides a dispute mechanism to address any discrepancy with Money Mart's records. Further information on how and when settlement benefits will be available will be posted on this website. |
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| MISCELLANEOUS |
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| Q: | Did Money Mart give out my name to anyone? |
| A: | Your personal information has not and will not be provided to anyone except the lawyers and the court. Money Mart will determine from its computer records those who are entitled to the release of debt, transaction credits and/or cash credits, if any, if the settlement is approved. |
| Q: | What if I have further questions? |
| A: | If you still have questions, you can contact Sutts, Strosberg LLP by email at moneymartclassaction@strosbergco.com or by telephone toll free at 866.396.3229. |
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| KEEPING UP-TO-DATE |
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| Q: | How will I know what is happening with respect to the settlement? |
| A: | You should review and continue to monitor the website www.moneymartclassaction.com from time to time to keep up to date with the developments in the settlement of the class action. |
