Agassiz’s Pioneer Trading Post has been ordered to pay $3,397.13 to the former owner of a vintage accordion after a judge found their interest rate was the equivalent of 300 per cent a year. (Grace Kennedy/The Observer)

B.C. pawn shop ordered to pay thousands after charging ‘criminal’ interest rate

An Agassiz pawn shop charged 25% interest a month, similar to other shops in the region

Agassiz’s Pioneer Trading Post has been ordered to pay more than $3,000 to the former owner of a vintage accordion, after a judge found the pawn shop’s interest rates were “criminal.”

In a judgment issued last week (Sept. 5), provincial court judge Kristen Mudstock said the Fraser Valley business could not legally charge 25 per cent interest monthly for a three-month loan agreement.

The business had taken Garry Hemminger’s antique accordion as security for a $500 loan back in 2017, which Hemminger would be required to pay back with the interest at the end of the three months. If he didn’t, the accordion would go to Pioneer Trading Post.

“The claimant and the defendants did not enter into this pawn agreement for an illegal purpose or with an evil intention. This was not a classic loan-sharking transaction,” Mudstock wrote in her decision.

However, because the interest rate exceeded 60 per cent a year (the annual interest rate was effectively 300 per cent, even if the loan was only in effect for three months), it was found to be a criminal interest rate.

SEE ALSO: 2-year investigations nets $900,000 in refunds for payday loan customers

According to the judgment, owners Tracey and Adrian Davies were unaware that their interest rate was considered criminal. However, they were still ordered to pay Hemminger back $3,900 for the 1978 Excelsior accordion — which had been sold in September of 2017 — minus the principal loan amount and the original $1.50 electronic transfer fee, as well as $1.37 in interest.

“We really debated if we were going to do pawn anymore,” Tracy Davies said about receiving the judgment.

Immediately after the judgment, Davies said she began searching to find out what other pawn shops were offering for their loans.

“The minute we got our judgment, we went online right away to find out what we were doing wrong,” she said.

She found that their interest rates were in line with what many pawn shops were asking around the region, and was in fact lower than some. A few Davies had contacted were asking for up to 30 per cent a month, while some offered lower interest rates, around 10 per cent, but had exorbitantly high “storage fees” for the item.

The main difference Davies found between their loan terms and other pawn shops is that Pioneer Trading Post offered theirs as a three-month loan, while others had it as a renewable one-month loan.

“It’s exactly the same as everyone else is doing,” she said. “We just didn’t renew it every month. That’s the only difference.”

SEE ALSO: B.C. government aims to stop concert ticket, payday loan gouging

Under the criminal code, the legal monthly interest rate is just five per cent.

Since receiving the judgment last week, Davies said the shop has altered its agreements for future loans to be a renewable monthly loan — something they had wanted to avoid originally because of the hardship it could cause for people looking for money.

“Can you get on your feet in one month?” she said. “That’s the major reason why we did it” as a three-month loan.

Davies said this is the first time in the shop’s three years in business that they had dealt with a legal situation like this.

The pair are looking into getting a lawyer to appeal the judgment, so they don’t have to pay thousands to Hemminger, who had never repaid the original loan or interest.



grace.kennedy@ahobserver.com

Like us on Facebook and follow us on Twitter

Just Posted

Mystery illness killing Kootenay bees

Samples being sent to laboratories for analysis

Grand Forks hires interim Chief Administrative Officer

Ron Mattiussi retired as Kelowna’s city manager in March 2018

COLUMN: Poster plea from vape companies feels disingenuous

Blue posters have shown up at Boundary gas stations saying ‘Vaping is legal but we can’t talk about it’

Border Bruins win 1, lose 2 on opening weekend

Goalie Shane Zilka named MVP of the week

Sounds of new exhibits echo through Grand Forks art gallery

The gallery hosts shows on the Sinixt, our collective anxiety and what makes a ‘real’ experience

Third instance of Trudeau in skin-darkening makeup emerges

Another instance of Trudeau using makeup to darken his face has emerged, within 24 hours of the first

B.C. MLA’s former constituency assistant charged with fraud, breach of trust

Charges announced Sept. 19 more than two years after Martin fired Desmond Devnich for alleged thefts

B.C. salmon farm inspection deal reached with Indigenous people

Monitoring to determine if any Broughton region farms stay open

RCMP seize $1.9 million in B.C. traffic stop

The driver and passenger were detained under the Controlled Drugs and Substances Act

Yearbook photo surfaces of Trudeau wearing ‘brownface’ costume in 2001

The report describes the occasion as an ‘Arabian Nights’-themed gala event

‘Troubling, insulting’: NDP Leader Jagmeet Singh reacts to Trudeau’s brownface photo

Jagmeet Singh, leader of the New Democrats, responded with a call for love after Trudeau photos surface

35 of 87 dogs in 2018 Williams Lake seizure were euthanized, BC SPCA confirm

The dogs did not respond to the behaviour modification and remained terrified of humans

Elderly B.C. man gets 10 years in prison for sexually abusing young daughters

WARNING: This story contains graphic details and is not appropriate for all readers

Most Read