For seven months, Sébastien Vienneau, 20, says he paid around $120 a month for a personal loan with online lender Spring Financial, which he hoped would help boost his credit score. But for the more than $840 that came out of his account, he received no money upfront.
Woodstock, Ont.-based Vienneau had signed up for a so-called savings loan, which requires regular payments but provides no cash advance. While the lenders who offer these financial products say they’re meant to help people improve their creditworthiness, the loans often come with high interest rates and steep fees.
Global News has previously spoken to two borrowers from the same lender who say they didn’t completely understand the terms of their savings loans and felt pressured to sign contracts while on the phone with the lender’s sales staff.
But Vienneau says signing over the phone was especially difficult for him because he has autism.
The call was very loud, he says, with background noise from the agent’s side making it difficult to hear and process information.
Vienneau says he repeatedly asked the agent to move to a quieter spot.
“I said, my autism can’t hear you,” he recalls.
But the company, he says, did not accommodate his request.
Vienneau also says he asked multiple times if he could hang up to be able to properly review the contract on his own. But the Spring Financial agent told him he needed to make a decision then and there, he says.
He eventually signed a contract stipulating he would pay $4,422 over the course of three years and would get just $1,750 of that money back at the end of the term. The loan has an annual interest rate of 17.99 per cent, with interest and estimated fees of around $2,500, according to a copy of his loan agreement reviewed by Global News. The annual percentage rate (APR) of the loan, which reflects the full cost of borrowing including fees, is just under 39 per cent.
Spring Financial and its parent company, Canada Drives Group, did not respond to two requests for comment.
In previous comments to Global News, Tyler Thielmann, VP of consumer lending at Canada Drives, said the vast majority of the company’s customers prefer to have someone walk them through the loan agreement over the phone. However, he said, “if a customer would like to disconnect and review the contract on their own time they are more than welcome to do so.”
The company provides plain-language disclosures on the first page of the loan agreement and says it trains all its agents to be able to “accurately and adequately explain the product,” adding that an agent will verbally repeat multiple times to a savings loan applicant over the phone that they will not receive funds upfront. Thielmann also said Spring Financial has an online help centre and a client-care team to help borrowers who have questions after taking the loan. As well, the company sends out welcome emails and payment reminders to clients, he said.
‘I’m trying to build my life’
Vienneau says he came across Spring Financial in late 2019 while looking for a startup loan to set up a software company while attending a management and entrepreneurship program at Fanshawe College.
Knowing his credit score needed some help, Vienneau says he thought a savings loan would help him eventually access a business loan.
“I’m trying to build my life,” says Vienneau.
But it was only when his mother, Jacqueline Alves, noticed the Spring Financial charges on a joint bank account and reviewed the contract with him, that he says he fully understood the terms of the loan and the costs involved.
“I’ve never seen a contract like that before. It’s scary,” Alves says, adding that Spring Financial took “total advantage” of her son.
Vienneau says he disclosed his disability to Spring Financial and mentioned during the intake process that he receives a monthly income support through the Ontario Disability Support Program (ODSP).
Alves says she and Vienneau put a stop payment on the charges in July and moved the ODSP deposits to a different account. But what Vienneau had already paid to Spring Financial amounts to more than the $772 a month he normally receives through ODSP.
Spring Financial never contacted Sebastien about the stopped payments, Alves says.
A growing issue
The difficulties Canadians with intellectual, cognitive and developmental disabilities face when making financial decisions are a growing issue, says Michael Bach, managing director of the Institutes for Research and Development on Inclusion and Society.
“You’ve got so many people with disabilities living in poverty and desperate for access to credit and cash and in debt way over their heads,” Bach says.
Traditionally, Canadians living with disabilities have faced a stark choice between acting on their own — at best with informal support from someone they trust — or signing over the 100 per cent of their decision-making power to another person through a trusteeship arrangement or power of attorney, says Elizabeth Mulholland, CEO of Prosper Canada, a national charity.
But there is a middle way, advocates say.
So-called supported decision-making schemes allow people with disabilities to formally request the help of designated individuals, such as relatives and friends or professionals, when faced with delicate choices about things like their finances, health care and personal care.
“What we’ve been proposing is a system where people who may have difficulty making decisions on their own have access to support to make those decisions,” Bach says.
The idea would also be to have formal support agreements as well as a registry of those agreements that third parties, such as financial services providers, could easily access when dealing with persons with disabilities, Bach adds.
So far, though, only a handful of jurisdictions in Canada have made tentative steps toward that kind of setup. British Columbia has so far gone the furthest to create a legal framework enabling supported decision-making.
But even there, Canadians with disabilities may face obstacles, Mulholland says.
“There are instances where people have had these agreements in place, but the staff at the financial institutions weren’t knowledgeable enough to recognize what they were and consequently weren’t comfortable abiding by the terms of the agreement,” she says.
In Ontario, there’s only substitute decision-making, when a person with disabilities appoints someone else to make choices on their behalf.
“A person is either considered capable or not,” says Brendon Pooran, partner at Ontario-based PooranLaw.
If the province had a robust supported decision-making framework in place, situations like the one described by Vienneau “may be far less common,” he says.
Still, he adds, when someone asks for an accommodation because of their disability, companies have a duty to listen.
Under both the Ontario Human Rights Code and the Canadian Human Rights Act “there is a duty to accommodate to the point of what’s called undue hardship,” Pooran says.
For Canadians with disabilities who feel their rights have been trampled there may be a variety of avenues for recourse, depending on the specific circumstance, he adds.
But for cases involving small amounts of money, he says, “the primary means of recourse would be potentially small claims court to try to have the contract rescinded.”