TORONTO – Payday loan company Money Mart is preying on vulnerable people by exchanging gift cards for cash at half their face value, and the practice should be stopped, Ontario’s opposition parties said Thursday.
The New Democrats distributed copies of a sign posted in the window of a Money Mart in Hamilton, which promotes “a new way to get fast cash” by trading gift cards for 50 per cent of their cash value.
“Why does this government allow Grinches like Money Mart to steal Christmas from our most vulnerable people in Ontario,” asked NDP consumer critic Jagmeet Singh.
“Forcing individuals who are already under a great deal of stress during the holidays to pay this extraordinarily high rate for an exchange is simply disgusting.”
Singh said Money Mart’s “predatory” scheme takes advantage of the fact many charitable organizations give out gift cards to clients to help them buy gifts and food for the Christmas holidays.
“Is the minister’s heart two sizes too small so that he won’t ban this exorbitantly high exchange and allows paydays to take advantage of people like this,” he asked during question period.
The Progressive Conservatives also demanded action to immediately end Money Mart’s cash-for-gift-cards offer.
“It’s highway robbery,” said interim PC leader Jim Wilson. “It’s a sad indictment on society that we’re allowing it to happen. The government needs to shut it down right away.”
Consumer Services Minister David Orazietti said the gift card issue is a “tough” one because it involves individuals making trades, but added the government will look to see if it’s an area it should be regulating.
“Every day there’s a new, innovative twist by some of these organizations to sort of circumvent the spirit of what we’re trying to do in terms of establishing good, fair practices in the sector,” he said.
“It’s something that we’re prepared to review and examine and put in place, where appropriate, the regulations that will help protect consumers.”
Orazietti said the province was already reviewing regulations governing payday loan companies, and admitted he’d never heard of the cash-for-gift-cards deal until it was raised in the legislature Thursday.
However, he said the government needs to “tread carefully” in terms of how it regulates transactions like the cash-for-cards exchange.
“It is an ongoing challenge to ensure that the practices that are unscrupulous, like you’re talking about, that we ensure that these individuals are put out of business or that there are greater regulations,” said Orazietti.
“We want to make sure there is transparency and accountability when it comes to the criteria by which you can make these transactions.”
Money Mart did not immediately respond to requests for comment on its cash for gift cards policy.
Orazietti noted the government had taken action in the past against payday loan companies, and got guilty pleas in 2013 from the Cash Store and Instaloans for operating without a licence, resulting in a $150,000 fine.
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