01/31/2014 11:23 EST | Updated 04/02/2014 05:59 EDT

Cash Store Ordered To Pay $1M For Illegal Payday Loans

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The Cash Store, which also operates as Instaloans, has been ordered to repay more than $1 million to B.C. customers who were charged exorbitant interest rates on payday loans.

Under law, payday lenders cannot charge any higher than 23 per cent interest per month.

But, between November 2009 and March 2012, Cash Store Financial Group, which operates as the Cash Store and Instaloans in B.C., was doing just that, by charging customers extra to load the loans onto debit cards, before cashing them.

A CBC News investigation at the time found one customer paying approximately 35 per cent a month.

Consumer Protection B.C. took the Cash Store to court to force the company to pay back the money.

Now, Manjit Bains of Consumer Protection BC, says Cash Store has lost.

"Consumers have waited long enough, and it's time for Cash Store to refund their money," said Bains.

Before the legal battle, the Cash Store was ordered to place $1 million into a trust account. It's that money that will be used to repay the customers, who in total took out 68,000 loans over the course of 27 months.

If the Cash Store is unable to find all of the overcharged customers, Consumer Protection B.C. will take over the search.

The Cash Store has 30 days to appeal the ruling.

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