Cash Converters affected by new claims

Another Cash Converters client had 30 group payday loans in four years, and some loans were issued after she was in default.

The case studies were presented to Mr Budiselik by Labor Senator Jenny McAllister shortly after she told the inquiry that Cash Converters had changed its systems to eliminate any issues related to failing to meet responsible lending requirements.

“How do you explain this disparity between the proposition that you now have an internal system designed to ban and these case studies before us,” asked McAllister.

Mr Budiselik said he would have to investigate each of the customers’ issues in detail before he could provide a response.

“When we look at specific cases, around 90% of our loan portfolio includes a single loan,” Mr. Budiselik said.

Liberal Senator Jane Hume also pressured Mr Budiselik on his claims. Cash Converters has helped Australians facing financial exclusion and the risk of poverty and poor social outcomes.

“How does giving these people access to high interest rate loans improve their social, emotional and health outcomes?” “

Mr Budiselik said “we will provide this financial inclusion in a transparent and accountable manner”.

Maurice Blackburn is currently pursuing class action against Cash Converters for alleged violations of responsible lending requirements.

Miranda Nagy, Senior Counsel, Class Actions, Maurice Blackburn Lawyers:

“When consumer finance and leasing providers deliberately structure their products to avoid consumer protection laws, it is the vulnerable who suffer – those who can least afford to pay more.” , said Miranda Nagy, lawyer for Maurence Blackburn.

“There is a clear role for regulators and private authorities, such as class actions, to take action, hold the business accountable and provide redress to the thousands of people affected. “

Representatives from Good Shepherd Microfinance (GSM), backed by National Australia Bank, told the hearing that there are issues across the industry and that it is common to see clients with 12 different payday loans. the same time.

“We have seen a lot of worrying compliance issues… and very questionable responsible lending practices,” said Corrine Proske, Managing Director of GSM, Retail and Online.

“They are at risk and it is part of their business model.”