section 347(3)

INTRODUCTION AND BRIEF DESCRIPTION

A person is presumed to know that they are receiving interest at a criminal rate unless evidence to the contrary is presented.

SECTION WORDING

347(3) Where a person receives a payment or partial payment of interest at a criminal rate, he shall, in the absence of evidence to the contrary, be deemed to have knowledge of the nature of the payment and that it was received at a criminal rate.

EXPLANATION

Section 347(3) of the Criminal Code of Canada is a provision aimed at curbing the practice of charging exorbitant interest rates on loans. Essentially, this provision creates a legal presumption that a person who receives a payment or partial payment of interest at a criminal rate is deemed to have knowledge of the nature of the payment and that it was received at a criminal rate, unless there is evidence to the contrary. Under Canadian law, it is illegal to charge an interest rate that exceeds 60% per annum. Any interest rate that exceeds this limit is considered a criminal rate of interest, and is therefore unlawful. The purpose of this provision is to make it easier for prosecutors to prove that an accused party knew or ought to have known that they were charging a criminal rate of interest. The provision creates what is known as a "reverse onus" on the accused, meaning that the burden of proof shifts to them to show that they did not know or have reason to know that they were charging an illegal rate of interest. This is intended to make it easier for prosecutors to obtain convictions in cases where lenders or other parties may be engaged in exploitative lending practices. Ultimately, the goal of this provision is to protect borrowers from being charged exorbitant interest rates that could lead to financial ruin. By making it easier to prove that a lender knew or ought to have known that they were charging a criminal rate of interest, the provision serves as a deterrent against exploitative lending practices, while also providing a means for enforcing the law when such practices occur.

COMMENTARY

Section 347(3) of the Criminal Code of Canada deals with the issue of criminal interest rates. The provision essentially creates a legal presumption that a person who receives interest payments at a criminal rate has knowledge of the nature of the payment and that it was received at a criminal rate. This provision is important in deterring people from participating in illegal lending practices, which can be harmful to borrowers and the economy as a whole. The purpose of this provision is to hold the borrower responsible if they receive interest payments at a criminal rate, which helps prevent lenders from charging excessively high rates. It also serves as a warning to borrowers to be cautious when borrowing money, to avoid getting into debt with unscrupulous lenders who charge far more than they should. This provision also provides a critical tool for prosecutors who enforce lending laws by allowing them to prove a borrower's knowledge of criminal interest rates without having to prove it in every individual case. Criminal interest rates are any interest rates charged that exceed the legal limit set by the government. In Canada, these rates vary by province and territory, but generally, criminal interest rates are defined as being more than 60% per year. The purpose of setting a legal limit to interest rates is to protect individuals from exploitation by lenders who may be charging exorbitant rates, forcing them into a debt trap that is difficult to overcome. The provision of Section 347(3) assumes that borrowers who receive interest payments at criminal rates understood the illegality of such transactions. This presumption can be overcome if there is evidence to the contrary, such as if the borrower had no previous experience dealing with loans or had been misled by the lender. However, this is not an easy presumption to overcome. Therefore, if a borrower receives a payment or partial payment of interest at a criminal rate, they will be presumed to have known that the payment was received at a criminal rate. This provision plays a vital role in deterring lenders from charging criminal interest rates, and it has been successful in reducing the prevalence of illegal lending practices. Nevertheless, some lenders may still attempt to charge criminal interest rates, taking advantage of individuals who are desperate for credit or have limited options. In such situations, the borrower should look out for loan sharks and report them to the authorities. In conclusion, Section 347(3) of the Criminal Code of Canada is a crucial provision in deterring illegal lending practices. By making potentially unknowing borrowers responsible for their actions, the law helps to reduce the incidence of criminal interest rates. While lenders may still try to charge illegal interest rates, borrowers can protect themselves by being informed about lending laws and looking before signing on the dotted line.

STRATEGY

Section 347(3) of the Criminal Code of Canada creates a legal presumption that a person who receives payment or partial payment of interest at a criminal rate has knowledge of the nature of the payment and that it was received at a criminal rate. This creates a significant burden for defendants in cases where they are charged with criminal interest rate offences, as they must overcome the presumption of knowledge established under this section. When dealing with this aspect of the law, there are several strategic considerations that defendants and their counsel should keep in mind. First and foremost, it is important to understand the legal requirements for establishing criminal interest rates under section 347(2) of the Criminal Code. This provision sets out a specific interest rate threshold above which interest rates are presumed to be criminal. The current threshold is 60% per year, although this is subject to change. If the interest rate in question is below the threshold, there is no presumption of criminality, and the prosecutor must prove beyond a reasonable doubt that the defendant had the requisite knowledge and intent to charge them with a criminal offence. In cases where the interest rate is above the threshold, the presumption of knowledge under section 347(3) can be difficult to rebut. However, the courts have held that the presumption can be rebutted by providing evidence that the defendant did not have actual knowledge of the criminal nature of the payment, or that they believed the interest rate was legal. To rebut the presumption, defendants may consider presenting evidence that they were not aware of the legal meaning of criminal interest rates, or that they had received erroneous information about the legality of the interest rate in question. This could include evidence of discussions with lawyers, accountants, or other professionals who may have given incorrect advice about the legality of the interest rate. Another strategy that defendants may employ is to argue that the presumption of knowledge in section 347(3) violates their rights under the Canadian Charter of Rights and Freedoms. Specifically, defendants may argue that the presumption operates to shift the burden of proof onto them in a way that is inconsistent with the right to be presumed innocent until proven guilty, or that it infringes upon their right to be free from arbitrary detention or imprisonment. Ultimately, the best strategy for dealing with section 347(3) will depend on the specific circumstances of the case and the evidence available. However, by understanding the legal requirements for establishing criminal interest rates, providing credible evidence to rebut the presumption of knowledge, and potentially raising Charter arguments if applicable, defendants and their counsel can increase their chances of success in these types of cases.