An Ontario government consultation paper is a good start to improving protection for consumers of high cost loans, but is missing some important dimensions, according to the response submission from the Consumers Council of Council.

The provincial government followed up on a commitment to address the protection of consumers who use instalment loans, credit provided at interest rates that range from 30 to 60%, with a consultation paper. That paper posted a number of questions based on initiatives the government was considering, including clearer disclosure, separation of the loan’s costs from other optional services offered by lenders and possible limits on costs.

Consumers Council of Canada studied the sector in 2018, and those fundings showcased the questionable sales practices of lenders, and made numerous recommendations. That report, along with similar reports on rent-to-own and payday lending, formed the foundation of the Council’s submission.

The submission offered general support for most of the initiatives proposed, but warned that improved legislation was useless without improved enforcement. Many practices exist in the marketplace that seemingly flout existing laws. The submission also identifies numerous gaps in regulation that result in unacceptable risks to consumers, and comments on the absence of protections contemplated in the ministry’s original 2017 work towards improving consumer protection in the sector.

The submission is available for purchase in the Council’s online store.