Cash Converters will have to sell a huge amount of used guitars and discount DVD after it paid $42.5 million dollars to settle a class action lawsuit.
Best known for its pawnbroking services, Cash Converters has also established itself in the loan providing industry. But it’s the financial arm of the business that has caused all the trouble.
More than 60,000 customers in Queensland alleged that Cash Converters had charged them interest rates of up to 175% annually on loan amounts between $600 – $2000. The law firm representing the plaintiffs, Maurice Blackburn, argued the pawnbrokers breached Queensland consumer laws that impose a cap of 48 per cent annually on credit loans.
As a condition of the settlement agreement, Cash Converters does not have to admit any liability in relation to these money lending practices.