Earlier this week we told you about the landmark Supreme Court judgement which brought down the Hamme Ron one Orange Walk Pawn Shop for taking advantage of its customers. Justice Sonya Young found that Payday Advance and EZ Loans Pawning had taken advantage of their customer Janine Vega by charging her interest of 10 percent per month, or 120 percent per annum. The judge called this "excessive.."harsh and unconscionable". Today the attorneys who took on this benchmark case and others held a press briefing to discuss the importance of the judgement for other folks who are being taken advantage of by pawnshops:..
Estevan Perera - Attorney
"The first thing is, the money lenders are supposed to have a sign inside their business depicting the 48 percent or the maximum annual interest rate that they have. They must also give you the sign contract that states what they are charging the principal, the interest all the terms of the agreement. They must also not refuse from giving you an account of your statement whenever you want an update as to where you are how much, wants the balance and all of that. The money lenders must also not surpass the 4 percent interest rate whatsoever and then the 5th is that the money lenders are not entitled to keep the collateral that you give. So for example when you borrow and the money lender ask you for your collateral. now, what the money lenders are doing in Belize right now are they are asking the borrowers to sign over their property, their house and lot, their vehicles, they even promote it as pawn and drive that's the common words use right now. However, the money lenders are not entitled to keep that collateral as they are doing now. quite a number of them, if one should fail to make an installment payment what they make the customer believe is that if you fail to make that payment the product, the land, the house, the car becomes theirs and that is illegal, because that's not the way it works, you the money lender, if the money lender chooses and that's if the borrower does not pay the monthly interest rate and the principal as they have agreed, what the money lenders should do is take that collateral, take that house and sell it. So for example. If the property is worth a hundred thousand and they loaned only 4 thousand they are supposed to sell that house and lot get the 4 thousand, keep the 4 thousand but return 96 thousand to the actual customer and this is what's not happening. This is what's not happening in Belize. What they are doing is keeping the entire collateral. We have persons in Belize, where they have gone to pawn shops borrowing 5 thousand dollars and pawn shops have actually kept their house and their lot and are in the process of evicted them out of their property."
Kevin Arthurs - Attorney
"In the case of money lenders, the legislatures consider and calculated what the risk was worth and they put a cap on it. So, when the money lenders are calculating and formulating their business plan, they know that the maximum I can charge because parliament has calculated it, its 4 percent. The second thing is that these loans are not designed to be long term loans, these are supposed to be short term loans for small amounts, it has happened that because they have been unsupervised that they have spiraled without control and to become a monster on to themselves. I also want to as at this point that this is a good judgment for money lenders. If I am a good businessman and I want to do things right I know exactly what I can and cannot do,"
That's but a small part of our conversation with the attorneys, so tune in to Monday's newscast for an in-depth look at this story.
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