REPULSE BAY - The Hamlet of Repulse Bay has slammed the cash drawer shut when it comes to borrowing money over local airways.

Some lenders in Repulse Bay were perilously close to loansharking when they'd listen for people offering to borrow money at 100 per cent interest on the local radio station. - Darrell Greer/NNSL photo

Some residents were growing concerned over people using the local radio station to borrow money, with the promise of paying it back at 100 per cent interest.

People would borrow $100 and pay back $200.

Sometimes they would borrow as much as $500 and be on the hook for $1,000 come payday.

The practice is illegal under Section 347 of the Criminal Code, which deals with criminal interest rates.

In Canada, it is illegal to enter into an monetary agreement which pays an effective annual rate exceeding 60 per cent of the amount advanced.

Anyone receiving $200 back on a $100 loan would be breaking the law.

Repulse SAO Steve Mapsalak said he put an end to the practice shortly after receiving a complaint earlier this month.

He said once he looked into the matter, he realized there was far too much of it going on.

"To be honest, I really don't listen to local radio very much," said Mapsalak.

"I found out every day the radio station went on the air, about, probably, half the callers were people looking to borrow money.

"Almost all of them were promising to pay back twice what they borrowed.

"I also stopped people from going on the radio and trying to sell tobacco, because there was too much of that going on, as well."

Mapsalak said some families will be better off this Christmas with people not being allowed to borrow money that way anymore.

He said nobody complained when he informed the community borrowing money on the local radio station would no longer be allowed.

"This was being very hard on some people, who were using up their paycheque before they even received it.

"The people lending the money were enjoying it and they're the only ones in the community who, probably, were sad to see it stopped.

"It was mainly one group of people who were borrowing money that way, but they kept doing it over and over on the radio, every few minutes, until they were given the money by someone."

We welcome your opinions. Click here to e-mail a letter to the editor.