The Government of Ontario announced on December 9, 2015 that it
will introduce legislation to increase protections for consumers
who use high-cost alternative financial services, such as payday
loans, instalment loans, rent-to-own services and cheque-cashing
services and to better protect those with debts in collection.
The legislation has not yet been introduced. The
announcement provides that the proposed Alternative Financial
Services Statute Law Amendment Act would amend various existing
consumer protection legislation to increase protections for
consumers as follows:
Consumers cashing cheques at alternative financial service
providers would have more information made available to them and
would benefit from a cap on the rate of cheque-cashing
Consumers using rent-to-own services would benefit from a grace
period for repayment;
Consumers using instalment loans would be certain that the
costs of optional insurance would not be excessive; and
Consumers who are repeat payday loan borrowers would have the
option of a longer repayment period.
The announcement follows a consultation on this topic that took
place earlier this year. The Government published a consultation paper and sought submissions from
the public, which were due on August 14, 2015. Submissions in
response to the consultation have not been made public.
If the proposed legislation is enacted and brought into force,
providers of financial services to Ontario consumers will likely
have to revise their customer-facing disclosures and some of their
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