|
| SETTLEMENT |
| top |
| 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: | 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 (less the 10% levy to the Class Proceedings Fund) to be distributed to class members;
(b) $14.5 million to pay class counsels' fees, disbursements and taxes. Class Counsel have appealed this component of the settlement and a copy of the notice of appeal may be viewed here;
(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 $56,262,076;
(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 $3,000,000 levy of the Class Proceedings Fund on the transaction credits of $3 million; and
(f) administrative costs estimated to be $2 million. |
| Q: | When will the benefits under the settlement be available? |
| A: | The debt release and the transaction credits are now available. The cash credits will be available after July 15, 2011 |
| Q: | How do I obtain debt release? |
| A: | Money Mart will notify class members who are entitled to debt release that they have been released by Money Mart from their indebtedness, that they are in good standing and that they can avail themselves of all the products and services available at Money Mart stores, subject to normal qualification criteria. |
| Q: | How do I obtain transaction credits? |
| A: | A class member entitled to transaction credits may determine the amount to which he or she is entitled by calling 1.866.504.7237, accessing the website at www.moneymart.ca or attending at any Money Mart store and providing such information as is required by Money Mart to verify the class member’s identity. |
| Q: | How can I use the transaction credits? |
| A: | A class member may use his or her transaction credits for eligible services by attending at any Money Mart store and establishing identity. The use of each credit will be recorded electronically by Money Mart in its computer records. Alternatively, a class member may obtain certificates evidencing some or all of his or her transaction credits and may transfer some or all of these electronically in Money Mart’s computer records to a named transferee by calling 1.866.504.7237, or accessing the secure website at www.moneymart.ca, by attending at a Money Mart store, or transferring the certificate by affixing his or her signature thereon and delivering the signed certificate to another person who can then use the certificate. |
| Q: | What can I do if I dispute my entitlement to transaction credits, the amount of the transaction credits or debt release? |
| A: | A dispute concerning whether a person is entitled to transaction credits or debt release, or whether a person’s payday loan/fast cash advance transaction history is accurate, or whether the allocation of transaction credits is correct, or whether the person is entitled to debt release should be made in writing to the Referee, Reva Devins, at 298 Heath Street E., Toronto, ON M4T 1T4, email: redevins@sympatico.ca, and provide objective evidence in support of his or her position in the dispute.A dispute concerning whether a person is entitled to transaction credits and/or cash credits, whether a person’s fast cash advance transaction history is accurate or whether the transaction credits and/or cash credits allocated to a person are correct, shall be made in writing to the Referee on or before October 2, 2010.A dispute concerning whether a person is entitled to debt release or that a settlement class member has been treated in accordance with the provisions of the agreement in respect of the use or transfer of transaction credits and/or payment of cash credits shall be made in writing to the Referee on or before April 2014. |
| 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 cheque 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.
|
| 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 15, 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: | 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: | 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: | 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 under appeal to the Court of Appeal. |
| 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. |
|
| GENERAL |
| top |
| 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 history 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. The settlement became final on April 2, 2010. The opt-out period expired on June 1, 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: | 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. |
|
| KEEPING UP-TO-DATE |
| top |
| 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. |
