Licensed Vs. Unlicensed Lender
See the key differences between licensed and unlicensed lenders Know your rights, protect your money and personal data.
What are the differences between Licensed & Unlicensed Lenders?
Why does it matter?
Government Licensed Lender
Regulations
Operates under government regulation, follows Consumer Protection laws, offers transparent fees, data security, and fair lending practices. Builds trust and long-term credibility
Consumer Protection Act (CPA)
The Consumer Protection Act ensures payday lenders in Alberta operate fairly and transparently. It protects borrowers by enforcing fair rates, debt collection behavior and privacy protection. When a company is in breach of the CPA, they will typically need to reimburse the customer with all costs and fees
Fees, Costs & Rates
- Fair rates and fee limits
All costs and fees need to be within the Provincial government amounts. If a fee is does not adhere to regulations, licensed lenders are not allowed to charge anything more than in the contract
Debt Collections Process
- Respectful collections; no threats or harassment
Privacy & Data Protection
- Privacy rights; lenders can’t contact your employer or family and mention anything to do with a loan or that you are involved with a loan company. In short, it guarantees you’re treated with fairness, respect, and privacy, something unlicensed lenders often ignore
- Data Protection matters. Licensed lenders protect your personal information with strict security measures and comply fully with all privacy laws, ensuring your data is safe, confidential, and never shared without your consent
Unlicensed Lender
Unregulated
Not regulated, may charge illegal rates, use aggressive collections, or misuse personal data. High risk of hidden fees and customer harm
Consumer Protection Act (CPA)
Don’t follow the Consumer Protection Act, which means they aren’t required to protect personal data, disclose fees transparently, or offer fair repayment terms. This can lead to hidden costs, aggressive collections, and serious financial risk. Without following the CPA, you may face serious financial trouble
Hidden or High Fees, Costs & Rates
- Charge illegal or excessive interest rates and hidden fees
- Misrepresent loan terms or hide important repayment information
Debt Collections Harassment
- Use aggressive or threatening debt collection practices
- Contact your employer, family, or friends about your debt
Unlicensed lenders have been known to persistently call multiple times a day, and at all hours of the day. They may also try to embarrass customers into paying by tell their references, personal and employment that they have not been paying for their loans.
No Privacy & Data Protection
- Contact your employer, family, or friends about your debt
- Unlicensed lenders often don’t respect your privacy. They may sell your personal information, which can be used in fraud or other criminal activity. In some cases, this has forced customers to go to court to prove their innocence
IMPORTANT TO KNOW:
When a licensed lenders breaks any regulations or rules, all clients affected will be reimbursed their in full.
Check out an exampleee from CBC News.
Payday lender to refund $547K for alleged law violations | CBC News
Government License Number & APR information
Every licensed lender needs to show their licensed number and APR information on their page. This info. will typically be show at the bottom of a website
Government License Certificate
As part of government regulation, a company must show the customer, a copy of their government license. This is typically show to the customer during the application stage
Government Website License check
Click me & check if a business is licensed (Service Alberta)
Select License Type: Payday Loan to find a Payday Lender
