Borrowers charged 633% interest reach court settlement
ABOUT 37,500 people who were charged up to 633% interest on short-term loans will share in a $23 million settlement for customers of Cash Converters.
Maurice Blackburn lawyers secured the settlement that covers New South Wales Cash Converters customers who took out a short-term loan between July 2010 and when the consumer lending laws changed in July 2013.
The Cash Converters "establishment fees" saw interest rates soar from 48% to 633% on one-month cash advance loans and to 145% on seven-month loans.
Ben Slade of Maurice Blackburn said the settlement was subject to Federal Court approval but it signalled a significant victory for thousands who would have had no other way to stand up to such injustice.
"This settlement is an excellent outcome for thousands of people who are doing it tough and who shouldn't have been taken advantage of," he said.
"We expect that Cash Converters borrowers in NSW will receive a full refund of the overpayment, plus interest."