EDMONTON, May 19 /PRNewswire/ - The Cash Store Financial Services Inc. ("Cash Store Financial") (TSX:CSF & NYSE:CSFS) commented today on Service Alberta's Compliance Order.
On May 10, 2011, the Government of Alberta issued an Order directing Cash Store Financial to cease certain practices. The Government of Alberta has stated that the Order is based on allegations that unfair lending activities have been practiced by Cash Store Financial.
Of particular concern to Cash Store Financial are reported allegations that the Company has required customers to purchase ancillary services, such as a pre-paid cash card, as a condition for receiving a loan. This is not Company policy but is the major issue identified in the Order. Company policy is to provide customers with the ability to immediately receive proceeds of their loan by way of cheque. Customers can and do receive loan proceeds, in branch, immediately upon request. The receipt by a customer of a loan offered or arranged by Cash Store is not contingent upon the purchase of any other good or service, including cash cards.
Cash Store Financial is surprised by the issuance of this Order, as it has had no prior notice that there were unresolved customer issues with Service Alberta or that an Order was being contemplated. We have maintained an open dialogue with Service Alberta. We have responded to consumer complaints brought to our attention by Service Alberta and have resolved complaints brought to our attention. We are unaware of any outstanding complaints at this time.Cash Store Financial has been a leader in consumer protection. We were one of the first companies in Canada to eliminate rollovers on a voluntary basis and we have been actively involved in encouraging all provincial governments to implement effective measures to protect consumers. It has been our objective to be compliant with provincial regulations and we have maintained a transparent and cooperative dialogue with provincial regulators. We are always concerned about allegations of improper sales practices by customer service representatives employed by our Company. We will vigorously investigate the allegations referenced in the Service Alberta Order, immediately upon receipt of the evidence on which those allegations are based. To the extent that the allegations are not supportable, Cash Store will take all necessary steps to dispute the findings and the Order.
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