A personal loan from internet lender Spring Financial cost Sébastien Vienneau, 20, about $120 a month for seven months. He anticipated the borrowing would help raise his credit score. But he didn’t get any money in advance for the more than $840 that was withdrawn from his account.
Vienneau, a resident of Woodstock, Ontario, had signed up for a “savings loan,” which entails recurring payments but does not provide a lump sum of money. These loans, which lenders claim are designed to help people improve their creditworthiness, are often accompanied by exorbitant interest rates and hefty charges.
It has been reported by Global News that the same lender’s sales personnel urged two customers to sign contracts even though they didn’t fully comprehend the terms of their savings loans.
But Vienneau believes that because he has autism, signing over the phone was particularly challenging for him.
The agent’s background noise made it impossible for him to hear and comprehend information, he claims.
Vienneau claims to have urged the agent several times to relocate to a more private area.
My autism can’t hear you,” he remembers saying.
However, the corporation, he claims, refused to comply with his request.
Vienneau further claims that he repeatedly asked if he may end the call so that he could analyze the contract on his own, and was repeatedly refused. According to him, the Spring Financial salesperson told him that the decision had to be made immediately.
When it came time to sign the papers, the contract stipulated that he would pay $4,422 over the course of three years, but he would only be entitled to get $1,750 in return. His loan agreement, reviewed by Global News, shows a yearly interest rate of 17.99 percent, with fees and interest totaling roughly $2,500. The annual percentage rate (APR) of the loan, which includes all costs, is little under 39 percent.
Two inquiries for comment to Spring Financial and Canada Drives Group went unanswered.
Consumer lending VP Tyler Thielmann of Canada Drives previously told Global News that the great majority of the company’s customers prefer to be walked through the loan arrangement via phone rather than by an in-person representative. He did say, though, that “a customer is quite than welcome to disconnect and analyze the contract on their own time.”
On the first page of the loan agreement, the company provides clear-language disclosures and says it trains all its agents to “accurately and adequately explain the product,” adding that an agent will verbally repeat multiple times over the phone to a savings loan applicant that they will not receive funds upfront. For those who have issues about their loan, Thielmann said Spring Financial has an online assistance center and client-care team. According to him, customers receive welcome emails and payment reminders from the business as a result of their efforts.