Money Mart revels in role as industry leader

"In terms of market recognition, they're it. They're the McDonald's of the industry," said Windsor lawyer Jasminka Kalajdzic…"I guess if you're going to label them best to the worst, they're the best of the worst. They work with us better, for sure," Laurie Campbell, program manager at the Credit Counselling Service of Toronto, said of Money Mart.

The Toronto Star
June 20, 2004

Money Mart revels in role as industry leader
Top short-term lender has 300 stores. Its loan cost: 59% interest, plus fees.
Jim Rankin and Nicole MacIntyre

"Through service excellence and convenience, we are the leaders in providing immediate access to cash and financial services" — Money Mart Mission Statement

With its slick ads, distinctive logo and neighbourhood dominance, Money Mart is the undisputed king of a growing fast-cash nation of Canadians who aren't feeling the love from big banks.

Since its inception in 1982 as a single cheque-cashing store in Edmonton, Money Mart has branched out into money transfers, mailboxes and payday loans, and grown to nearly 300 stores from coast to coast.

It's become part of the Canadian lexicon and, for the young, synonymous with "bank."

"Anyway," begins a blog entry by an author with unexpected car expenses, "it's like 10 minutes to 2 (p.m.) and I realized I didn't have as much money as I thought on me so I called the mechanic and explained I would be about 10 minutes late because I had to go to Money Mart to take out a cash advance."

In big cities, they're everywhere. At last count in Toronto, there were 23, a few in former bank buildings. The company accounts for a quarter of Canada's estimated 1,200 unregulated payday lending stores.

"Money Mart's taking the Starbucks approach to this. They're opening stores close together, blanketing to knock out competition," said John Lawford, of the Public Interest Advocacy Centre in Ottawa.

"In terms of market recognition, they're it. They're the McDonald's of the industry," said Windsor lawyer Jasminka Kalajdzic. Her client, Margaret Smith, a 66-year-old pensioner, is suing Money Mart and its U.S.-based parent company, Dollar Financial Group, in a proposed class action. It's one of many being launched against payday lenders, alleging the businesses charge what amounts to criminal interest rates on short-term loans.

The National Money Mart company has a standing policy of not speaking with reporters. When the Star called the Canadian headquarters in Victoria seeking interviews, a spokesperson declined comment and issued a statement.

"Money Mart is disappointed by the recent class-action suits and we plan to vigorously defend our interests in this matter," reads the statement. "Money Mart abides by the highest professional standards in providing quality financial products and services to Canadians. As the class-action suits have yet to go before the courts, we cannot comment on this matter further."

Its trademarked "Fast Cash Advance" is a payday loan which, according to the company's Web site, "is meant to bridge your short-term cash needs between paydays. If you are finding yourself turning to this product on a frequent basis, you may need to consider other sources of financing." In other words, like fast food, too much fast cash is not healthy.

Critics of the payday-loan industry say the Money Mart model is among the most transparent.

A one-week, $100 loan costs $18.94. Most of that is fees, with interest tacked on at a rate of 59 per cent per annum, just below the 60 per cent threshold set out in the Criminal Code.

Dollar Financial Group operates more than 1,000 stores in the U.S., Canada and Britain.

"Convenience, the right products, and quality service with a personal touch provide the motivation that brings customers back again and again," states the company Web site, explaining its "sound marketing and demographic principles" that include locating in fast-growth areas. "This, combined with a growing anti-bank sentiment, an increasing number of single-parent households, high incidence of employment interruptions, and the growth of employment in the service sector … reinforces the need for our services."

Whether the fees charged should be counted as interest is at the heart of the proposed class actions against Money Mart and other payday lenders.

"I guess if you're going to label them best to the worst, they're the best of the worst. They work with us better, for sure," Laurie Campbell, program manager at the Credit Counselling Service of Toronto, said of Money Mart.

When clients get into trouble with Money Mart, the company will accept programs to stop interest, "which is a huge, huge deal when the interest rates are so high," Campbell said.

Many companies offer no such break.


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