“In the past, ACORN Canada has secured stronger payday loan regulations at the provincial and municipal level,” the report said. “A disturbing trend has been observed in recent years whereby payday lenders are increasingly offering installment loans that are larger loans over much longer durations.”
High-cost loans, according to the group, typically carry an annual interest rate of over 30%. Legally, lenders are allowed to charge insurance, fees and other expenses on installment loans in excess of an annual interest rate of 60%, it said.
To offer a better analysis of this trend, ACORN conducted a survey between November 2021 and January. A total of 440 people took part in the survey, with 113 saying that due to the pandemic, they were forced to take high interest loans. The findings were based on responses from 113 people on high-cost loans.
In addition to the survey, in-depth research was conducted. Interacted with a few people who showed interest in sharing their experiences.
“Not only did the pandemic seriously [impact] financial condition of the people, but many people continue to depend on financial aid. What is worse is that many people are not seeing an improvement in their financial condition,” the report said. “Most people expressed concern at the end or end of federal support.”