New survey shows Canadian payday loan customers are informed consumers who value service and convenience

Vast majority of customers (4 out of 5) prefer payday loans over other loan options

Ottawa, June 14, 2005 – Canada’s first large-scale survey about the payday loan industry confirms the vast majority of payday loan customers are informed consumers who know what they are buying.

The Environics Research Group was commissioned by the Canadian Association of Community Financial Service Providers (CACFS) to conduct the first large-scale survey of the Canadian payday loan market. “This survey, released today, clearly demonstrates the strong demand from payday loan customers for the convenience and services of payday loan providers,” says CACFS President and CEO Bob Whitelaw.

The survey finds that payday loan customers are educated Canadians who know what they are paying for and appreciate the convenience and flexibility of the loans to help them with short-term cash needs. Payday loan customers choose payday loans over other options because they value the convenience and flexibility of the loans.

The top three reasons people take out a payday loan are:

  • for emergency cash to pay for necessities (36 per cent);
  • to help out with an unexpected expense, like a car or household repair (24 per cent); and,
  • to avoid bouncing cheques or incurring late charges on routine bills (21 per cent).

The survey concludes that 72 per cent of payday loan customers believe that most payday loan providers charge reasonable fees for the services they provide, considering short-term loans are offered without credit checks or collateral.

“Demographically, it is clear that payday loan customers are typical Canadian families, although slightly younger and many with children,” says David MacDonald, Environics Vice President of Consumer Research. “This survey also clearly shows that they are willing, knowledgeable, customers who are satisfied with the service they receive.”

A typical payday loan user has a post-secondary school education, is employed full-time, and also enjoys banking privileges. The average household income for payday loan customers is approximately $41,500. Payday loan customers who have household incomes above $50,000 represent 35 per cent.

“This survey is part of our ongoing commitment to educate governments, interest groups, credit counsellors, and the public about the payday loan industry,” says Whitelaw. “The survey reveals that Canadians who have not used a payday loan know very little about the product. The findings give us an accurate picture of Canadians who use payday loans and why they use the product and reinforce the high level of professional, personal service our customers receive.”

Environics Research Group conducted 2000 telephone interviews between February 1 and March 7, 2005 using a 1000-person random sample of Canadians in the general population survey and a separate 1000-person random sample of recent customers of payday loans. Neither CACFS nor any of its members were disclosed as the research sponsors. The margin of error was + or – 3.1 in each of the surveys.

About CACFS

The Canadian Association of Community Financial Service Providers is a national association of payday loan providers that offer small-sum unsecured short-term credit and operate retail outlets across Canada. CACFS represents 750 stores nationwide operated by 50 companies, or about 75 per cent of the industry.

For additional information and a copy of the full research report, please contact:

  • Sophie Lambert
  • Trillium Corporate Communications
  • Toronto
  • (416) 322-3030 ext. 227
  • (416) 505-3350 (cell)
  • sophie@trilliumpr.com