Victorian mum sues Cash Converters alleging unjust pawn agreements and payday loans
A Victorian mother of seven has taken Cash Converters to court alleging that 76 pawn agreements and 23 payday loans were unjust and unconscionable.
She alleges that repaying the payday loans and pawn agreements caused her substantial hardship.
The claim also alleges that the payday loans were unsuitable and did not comply with responsible lending laws.
“This Victorian mother alleges that because of these loans and pawn agreements she was left without enough money to pay for her family’s everyday expenses,’ said Lachlan Edwards, Solicitor at Consumer Action Law Centre.
The claim, lodged in the Magistrates Court, also alleges that the pawn agreements carried an effective interest rate of between 360% per annum and 420% per annum.
‘In Victoria under a pawn agreement a lender can charge whatever fees they like,’ Edwards said.
Consumer Action is concerned that payday lenders will increasingly give people pawn agreements because they are less regulated. For example, responsible lending laws do not apply to these types of agreements.
‘Without responsible lending obligations on a provider of a pawn agreements, people are at risk of falling into a spiral of debt,’ said Edwards.
‘The government needs to reform the law around pawn-broking to make it fairer for Victorians.’
Consumer Action’s client is seeking a refund of fees and changes and damages for the loss of goods that were pawned.
If you’ve faced a similar problem and are in Victoria, please contact our advice services.
This client is not available for comment.