Clients who went looking for a way to get into higher yield investments ended up leaving with a $22,000 loan and $112,000 in interest payments, a BC court heard.
Clients who went looking for a way to get into higher yield investments ended up leaving with a $22,000 loan and $112,000 in interest payments, a BC court heard.
A B.C. Supreme court judge made the determination, tossing out a claim from a financial services company in Victoria after it sued Christopher Bryce Laughlin and Pauline Louella Laughlin for debts unpaid.
“The Laughlins have paid $21,400 on that debt, yet the plaintiff – Connor Financial Services International Inc. – asserts that its loan agreement with the Laughlins entitles it to a further $119,000 approximately, up to the start of the trial, with more to be claimed after that,” Judge George Macintosh said. “Simply to state those numbers is to expose the agreement for the radically unfair agreement that it was.”
His comments come after the couple borrowed $22,221 from Connor Financial Services and were charged an annual interest rate of 42 per cent on a loan. The judge’s comments also back his decision to rule in favour of the defendants because their retirement saving plans and other investments were collapsed to buy mutual funds from the company.
“I find that Connor’s companies owed and breached a fiduciary duty to the Laughlins,” the judge said. Macintosh described the Laughlins as “babes in the woods” and “naive” when it came to their agreements with Connor. “The Laughlins argue that the loan agreement was unconscionable. I agree that it was.”
#pb#
The Laughlins approached Connor Financial in 2000 to seek financial advice after looking to manage and eliminate their debt. According to the judge, they held “conservative” retirement savings plans and believed advice received from the company would leave them debt-free in three years.
Well, that didn’t happen. They collapsed their savings plans and allowed Connor Financial to purchase mutual funds, which left them in a risky position.
“The Laughlins signed many documents, making many commitments. Ms. Laughlin found it to be overwhelming. Neither of the Laughlins knew what they were getting into,” the judge said.
When the loan was first taken out, the interest rate was 13 per cent. But in small print on the reverse side of the document, Connor could change the interest rate at any time with 30 days’ notice, the court heard.
There were no criteria required to do that, such as a change in the prime lending rate, Macintosh said. The Laughlins wanted to make their final payment in 2004 and sell what was left in the mutual fund to put towards debt. But their funds were locked in until 2008.
The B.C. Securities Commission sanctioned Connor for pocketing interest from clients’ trust accounts in the 1990s, Macintosh said. In 2005, the commission prohibited Connor and Connor Financial Corp. from lending money to mutual fund clients.
A B.C. Supreme court judge made the determination, tossing out a claim from a financial services company in Victoria after it sued Christopher Bryce Laughlin and Pauline Louella Laughlin for debts unpaid.
“The Laughlins have paid $21,400 on that debt, yet the plaintiff – Connor Financial Services International Inc. – asserts that its loan agreement with the Laughlins entitles it to a further $119,000 approximately, up to the start of the trial, with more to be claimed after that,” Judge George Macintosh said. “Simply to state those numbers is to expose the agreement for the radically unfair agreement that it was.”
His comments come after the couple borrowed $22,221 from Connor Financial Services and were charged an annual interest rate of 42 per cent on a loan. The judge’s comments also back his decision to rule in favour of the defendants because their retirement saving plans and other investments were collapsed to buy mutual funds from the company.
“I find that Connor’s companies owed and breached a fiduciary duty to the Laughlins,” the judge said. Macintosh described the Laughlins as “babes in the woods” and “naive” when it came to their agreements with Connor. “The Laughlins argue that the loan agreement was unconscionable. I agree that it was.”
#pb#
The Laughlins approached Connor Financial in 2000 to seek financial advice after looking to manage and eliminate their debt. According to the judge, they held “conservative” retirement savings plans and believed advice received from the company would leave them debt-free in three years.
Well, that didn’t happen. They collapsed their savings plans and allowed Connor Financial to purchase mutual funds, which left them in a risky position.
“The Laughlins signed many documents, making many commitments. Ms. Laughlin found it to be overwhelming. Neither of the Laughlins knew what they were getting into,” the judge said.
When the loan was first taken out, the interest rate was 13 per cent. But in small print on the reverse side of the document, Connor could change the interest rate at any time with 30 days’ notice, the court heard.
There were no criteria required to do that, such as a change in the prime lending rate, Macintosh said. The Laughlins wanted to make their final payment in 2004 and sell what was left in the mutual fund to put towards debt. But their funds were locked in until 2008.
The B.C. Securities Commission sanctioned Connor for pocketing interest from clients’ trust accounts in the 1990s, Macintosh said. In 2005, the commission prohibited Connor and Connor Financial Corp. from lending money to mutual fund clients.
