Payday loan company is exchanging gift cards for cash at half their value
Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday, December 6, 2014
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.”
Money Mart officials and the Canadian Payday Loans Association did not respond to requests for comment, but an employee answering the phone at a central Hamilton Money Mart confirmed the 50 per cent fee.
“It’s been pretty successful,” the employee said. The practice is being tested at Money Marts in Hamilton and Niagara.
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.
Tom Cooper, executive director of the Hamilton Roundtable for Poverty Reduction, wrote in an email that providing gift cards is “often a much more dignified approach than requiring people to line up at food banks or for Christmas hamper programs.”
“Unfortunately, it seems that Money Mart is piloting a project locally that seems to take advantage of this very vulnerable group.”
Cooper noted that others may get a gift card from a family member and want to exchange it, but that those people “may be having greater challenges paying rent or utilities during the holidays,” and, he said, Money Mart is taking advantage of “desperation.”
He said the issue needs to be fixed with legislation. (Source: Hamilton Spectator)