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August 20, 2022 - 7:00 AM
A Vernon judge has accused a debt collection agency of purposely waiting almost two years before pursuing the money through the courts so it could rake up 40 percent interest on the loan.
According to an Aug. 9 B.C. Provincial Court decision, judge Jeremy Guild dismissed debt collection company EOS Canada's application for a default order so it could go after a $22,000 loan that was in arrears.
Judge Guild shot holes in almost every aspect of EOS Canada's application to go after the debt criticizing the company on many levels.
The judge questioned why it had taken the company 22 months from the loan defaulting to get a court order.
"Of course, any delay in filing was of significant benefit to EOS (Canada) as it could claim interest at 39.99 per cent, rather than at the court-ordered interest rate," Judge Guild said. "EOS (Canada) also did not provide any explanation for the 22-month delay before it filed a claim, or for any other delay."
The decision didn't give the original amount of the loan but said it stood at $8,632 when it defaulted.
However, in the 22 months since, the company had tacked on $13,750 in interest. The decision said the rate of interest was 39.99 per cent.
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Originally the loan was issued by easyfinancial Services who sold the loan to EOS Canada when it defaulted.
The case highlights the exceptionally high interest charged by pay-day money lenders.
Judge Guild criticized almost every step the debt collectors had taken in the paperwork it had submitted to the court.
"There are significant contradictions between what is stated in the Affidavit and the exhibits attached in support," the judge said. "There is no real way to evaluate the reliability or accuracy of the information allegedly provided. What is left is a bare assertion with no foundation."
The judge also pointed out that the calculators in the affidavit are incorrect.
"Interest is mixed in with the principal amount and the totals are inaccurate," he said. "Those errors also call into question the accuracy and reliability of the Affidavit.
"There is an onus on an affiant to ensure that their sworn testimony is accurate. Where the information is so vague and inaccurate, in such a significant way, it calls into question the bona fides and reliability of the Affidavit’s contents," judge Guild said.
The judge also pointed out there is no proof EOS Canada is licenced to carry out business in B.C.
"It may be that EOS (Canada) has such a license, but in the absence of evidence that demonstrates EOS is complying with all the requirements for a collection agent, in my view it would be improper for this court to permit a claim to proceed," he said.
Ultimately, Judge Guild dismissed the debt collector's applications for a court order.
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