A new report warns in a country where there are more payday loan shops than Shoppers Drug Marts, stricter government regulations are needed to rein in high-interest lenders amidst the COVID-19 pandemic.

When confronted with inaction, pay day loan businesses will dsicover “windfall profits at the cost of low- and moderate-income people” who risk dropping into “debt traps” throughout the outbreak, in line with the study circulated Tuesday by the Canadian Centre for Policy Alternatives.

“The sharks continue to be circling, and COVID-19 is tossing several thousand individuals to the water each and every day, making them prey that is easy” the report states.

Ricardo Tranjan, a researcher that is senior the CCPA’s Ontario workplace stated a COVID-19 reaction “should add further regulation of payday lending” including slashing maximum interest levels.

“We can expect payday financing to drastically increase as thousands of people, particularly low wage employees, lose their income, ” he said.

“We want to ensure whatever earnings help they have been getting permits them to satisfy their fundamental needs and does not go toward spending interest that is exorbitantly high. ”

Pay day loans are the most costly kind of credit available; in Ontario, the yearly interest on an online payday loan varies as much as 391 %. Some payday lenders in the province appear to be expanding their range of services amid the COVID-19 pandemic as previously reported by the Star, as banks slash interest rates.

The CCPA report says across Canada, there are more payday loan shops than Shoppers’ Drug Marts — and in Toronto, there is a payday lender for every Tim Hortons.

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