The province has announced that new legislation offering consumers protection from high-cost credit products is now in effect.
“High cost credit products, or ‘payday loan-like’ products, can be confusing for some consumers and lead people into a cycle of borrowing that’s hard to get out of,” Justice Minister Heather Stefanson said. “This new legislation ensures there is transparency in the process and helps consumers make more informed decisions.”
The new legislation regulates businesses that offer, arrange or provide high-cost credit products, regardless of whether they have a physical Manitoba location or provide their service over the Internet. Businesses offering these products are required to:
- be licensed with the Consumer Protection Office;
- provide potential borrowers with a detailed information disclosure document prior to an agreement being signed and give the borrower reasonable time to review the information;
- display clear signage explaining the related costs and fees in each location these high-cost credit products are offered; and
- allow borrowers to cancel their loans within 48 hours and repay their loans without penalty.
Companies offering high-cost credit will also support the Manitoba Borrowers’ Financial Literacy Fund through their licencing fees. This fund supports programs designed to educate and improve the financial literacy of borrowers and potential borrowers.
Manitobans are encouraged to learn more about consumer protection issues and their rights under the law by visiting www.gov.mb.ca/cca/cpo.
