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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. The court's approval of the proposed settlement was sought at the Approval Hearing scheduled for February 22, 2010. In the meantime, Justice Spies adjourned the trial. |
| 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 came into effect on April 1, 2009. Certain provisions of the Act have not yet come into force but are expected to do so in the near future. Money Mart's business model for payday loans/fast cash advances will change 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 Iaccobucci, a proposed settlement was obtained which would come into effect if it was approved by the court. Both sides believed this proposed settlement was fair and reasonable considering all of the risks. |
| Q: | Who will be included in the settlement approved by the court? |
| A: | Currently, anyone who obtained a payday loan/fast cash advance at any Money Mart location in Ontario between August 19, 1997 and September 9, 2007 and repaid it by cheque is a member of the class. The settlement provides that the settlement class will also include anyone who repaid a payday loan/fast cash advance obtained at any Money Mart location in Ontario by cheque between September 9, 2007 and December 31, 2009. |
| Q: | If I repaid all of my payday loans/fast cash advances with cash on or before the due date instead of by cheque, will I be 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 proposed settlement provides a dispute mechanism to address any discrepancy with Money Mart's records. If the court approves the proposed settlement, 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: | If the proposed settlement is approved, 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. |
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| SETTLEMENT |
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| Q: | What benefits are available under the settlement? |
| A: | Money Mart will make settlement benefits of over $100 million available in full and final settlement of all claims of the settlement class members on the following basis:
(a) $27.5 million in cash;
(b) the release of all debts owed by settlement class members to Money Mart on April 30, 2009 that are still outstanding December 31, 2009. The amount of these debts is estimated to be in the range of $40 million;
(c) $30 million in transferable transaction credits, to be 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; and
(d) payment of the levy of the Class Proceedings Fund, on the transaction credits of $3 million. |
| Q: | If the proposed settlement is approved by the court, what happens to any debt that I owed to Money Mart on April 30, 2009 that is still outstanding? |
| A: | Repayment of debt is a personal decision that each settlement class member has to make. If you do not pay off your outstanding debt to Money Mart that was incurred by April 30, 2009 and the proposed settlement is approved by the court, 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.
If the proposed settlement is not approved by the court, you will still owe your debt to Money Mart, your credit will be affected, you will owe additional interest on the debt and you will not be able to access any of Money Mart's services. Class Counsel are recommending the proposed settlement however and expect it to be approved by the court. |
| Q: | If the proposed settlement is approved by the court, am I entitled to transaction credits if I owed a debt to Money Mart on April 30, 2009 that is still outstanding? |
| 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 if the proposed settlement is approved. So, if you owe a debt to Money Mart that was outstanding on April 30, 2009 which remains outstanding and 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: | If the proposed settlement is approved by the court, how will the $27.5 million of cash be distributed? |
| A: | If the court approves the proposed settlement, it will also decide how much the lawyers who worked for more than 6 years prosecuting this action will be paid from the $27.5 million and how much of the $27.5 million, if any, will be available for distribution to those settlement class members who do not have their debts to Money Mart forgiven as a term of the settlement. |
| Q: | If cash is available to be distributed to the settlement class, how will it be divided? |
| A: | If the settlement is approved and there is cash available to be distributed to the settlement class, those settlement class members who don't have their debts owed to Money Mart forgiven as a term of the settlement will be allocated a pro rata share of the cash calculated 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.
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| Q: | If the proposed settlement is approved by the court, 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 much will the lawyers be paid if the settlement is approved? |
| A: | If the settlement is approved, the court will, at the same time, decide how much the lawyers will be paid. The lawyers are seeking $27.5 million in payment of their fees, expenses and taxes. |
| Q: | Do I have to pay legal fees? |
| A: | No, you will not pay any fees to the lawyers. If the settlement is approved, the court will decide the amount which will be paid to the lawyers from the $27.5 million cash component of the settlement. |
| Q: | When and where will the Approval Hearing to consider whether or not to approve the proposed settlement be held? |
| A: | The court will decide whether or not to approve the proposed settlement of approximately $100 million, the amounts that will be paid and to whom, the method of distribution of the settlement proceeds and the amount to be paid as fees, disbursements and taxes to the lawyers at an Approval Hearing to take place on February 22, 2010 at 10 a.m. E.T. at the court house, 361 University Avenue, Toronto, ON. |
| Q: | Can I attend the Approval Hearing? |
| A: | Yes. The Approval Hearing is open to the public and anyone may attend. Class members and potential settlement class members who do not oppose the proposed settlement need not appear at the Approval Hearing or take any other action to indicate their desire to participate in the proposed settlement. Any class member or potential settlement class member who objects to the proposed settlement may attend the Approval Hearing in person or send a representative. |
| Q: | How do I find out the results of the Approval Hearing? |
| A: | The results of the Approval Hearing will be posted on this website as soon as the court releases it decision following the Approval Hearing. |
| Q: | What should I do if I want to object to the proposed settlement? |
| A: | The court will consider all objections to the proposed settlement. Please see the notice for the procedure for the submission of objections. |
| Q: | Is it a certainty that the proposed settlement will be approved? |
| A: | Class counsel believe that the settlement is fair and reasonable and in the best interests of the settlement class members. However, it is for the court to decide at the Approval Hearing whether or not to approve the settlement. There is always a risk that a proposed settlement will not be approved. If the proposed settlement is not approved, the trial before Justice Spies will continue. |
| Q: | Do I have to do something to participate in the settlement if it is approved? |
| A: | If the settlement is approved, 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, if any. 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, if the settlement is approved by the court. |
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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 proposed 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 proposed settlement of the class action and to learn about the claims process, if the proposed settlement is approved. |
