The Federal Court has authorized a $42.5 million settlement for a course action against Cash Converters.

The Federal Court authorized a $42.5 million settlement in March for a course action against Cash Converters concerning the charging of extortionate charges on unsecured loans. Cash Converters had been accused of acting unconscionably for breaching the interest that is maximum beneath the credit rating regulations.

This settlement follows a $16.4 million settlement authorized because of the Federal Court in 2018 in a split course action regarding interest charged on little quantity credit agreements.

Original action

It had been alleged that for one-month loans between April 2010 and June 2013, Cash Converters charged a lot more than 400% interest despite there being a cap that is legal 48%.

Lead plaintiff impairment pensioner Kim McKenzie brought a claim against Cash Converters in 2016 with respect to 30,000 Queensland borrowers. [1] Ms McKenzie ended up being charged $700 in brokerage costs across 15 loans that have been supposed to be solutions that are short-term. Consequently, the interest that is high from the loans had been leading customers into further financial obligation. Read more