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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Vernon’s pump prices second lowest in B.C.

Gasoline prices range from 102.9-114.9 cents per litre in North Okanagan city

First degree murder charges for North Okanagan woman

59-year-old woman charged in Round Lake suspicious death incident

Tours connect North Okanagan to history

Museum makes August all about field trips

Community Champion: Jake and Mary Spoor feel blessed to give back to Vernon

As immigrants themselves, Mary and Jake understand how isolating it can feel in a new country

Get Outdoors!: Rattlesnakes Are Fascinating! Part 2

Columnist Roseanne Van Ee provides information about rattlesnakes in the North Okanagan

B.C. records 146 new COVID-19 cases through long weekend

More that 28 people tested positive for the virus each day since Friday

Canucks tame Minnesota Wild 4-3 to even NHL qualifying series

J.T. Miller leads Vancouver with goal and an assist

COVID-19 vaccine efforts provide hope but no silver bullet to stop pandemic: Tam

There are more than two dozen vaccines for COVID-19 in clinical trials around the world

Passengers escape unharmed from destructive houseboat fire in Shuswap

Cause of blaze on Mara Lake under investigation, flames erupt at 2 a.m. Aug. 4

Alberta vehicles allegedly damaged in Summerland

Lug nuts loosened, windows smashed in several instances in Okanagan community

Interior Health reports nine new cases of COVID-19, 149 linked to Kelowna

Nine new cases were reported in the Interior Health region over the long weekend’s four reporting periods

Former Kelowna resident makes fundraising goal for cancer fertility treatments

Rebecca Hamilton recieved a boost in a battle against cancer - $25,000 for post chemo treatments

Study shines light on what makes LGBTQ+ youth feel safe in a community

The study goes beyond looking at school or family supports

Alberta to require masks at schools this fall, but still no mandate in B.C.

B.C. students are also set to return to classrooms in September

Most Read