Two class actions by Maurice Blackburn commenced in the Federal Court of Australia seeking compensation for Queensland borrowers who took out payday loans from Cash Converters stores or online. The cases concern ‘Personal Loans’ in the period between 30 July 2009 and 30 June 2013 ('Personal Loans Class Action'), or ‘Cash Advances’ between 28 April 2010 and 30 June 2013 ('Cash Advance Class Action').
Maurice Blackburn has the largest class action practice in Australia. We have obtained more than $2.6 billion in settlements for Australians since the establishment of the practice in 1998.
Cash Advance class action
What is this case about?
The Cash Advance Class Action was brought on behalf of nearly 30,000 Queensland Cash Converters borrowers who took out on-month loans on which a 'brokerage' fee was charged between 28 April 2010 and 30 June 2013. Maurice Blackburn's client, Kim McKenzie, alleged that the 'brokerage' fee caused the respondents to breach consumer protection laws imposing a 48 per cent per annum interest rate cap for loans in Queensland - which meant that the annual percentage rate of interest applicable for a 'Cash Advance' was in excess of 600 per cent per annum. The applicant also alleged that the respondents engaged in unconscionable conduct.
On 22 October 2018, the parties reached a provisional settlement in relation to the Cash Advance Class Action for a total amount of $16.4 million inclusive of costs.
The settlement is without admission of liability by Cash Converters.
The settlement and its terms has to be approved by the Federal Court before it can process. We do not yet know when the settlement approval hearing will take place.
If you think you may be eligible to be part of the Cash Advance Class Action, there is nothing you need to do at this stage.
If the settlement is approved by the Court there will be a process for determining class members' eligibility for compensation.
If you have not already done so, you may wish to register your details so that we can keep in touch with any updates about the settlement.
Personal Loans class action
What is this case about?
The other class action is in relation to Cash Converters' 'personal loan' product obtained by Queensland borrowers between 30 July 2009 and 30 June 2013.
Maurice Blackburn's client, Sean Lynch, alleges that the 'brokerage' fee charged on personal loans in this period caused the respondents to breach consumer protection laws imposing a 48 per cent per annum interest rate cap for loans in Queensland - which meant that the annual percentage rate of interest was in excess of 175 per cent per annum. The applicant also alleges that the respondents engaged in unconscionable conduct.
Hearing before the Federal Court
On 22 October 2018, the Personal Loans Class Action went to a hearing at the Federal Court of Australia in Sydney. The hearing finished on 9 November 2018.
The trial was to determine the claims of Mr Lynch and the issues that are common to the claims of the class members.
Cash Converters denies the applicant's claims and defended the class action at trial.
We suspect that it may be some time before a judgement is handed down. This is common for matters of this scale and complexity.
If you think you may be eligible to be part of the Personal Loans Class Action, there is nothing you need to do at this stage.
In the interim, you may wish to register you details with us (if you have not done so already) so that we can keep in touch with you about any updates.
Mr Lynch represents borrowers of Personal Loans. Please click on the links below to obtain copies of the following documents in the Cash Converters Class Action for which Mr Lynch is the representative applicant:
Ms McKenzie represents borrowers of Cash Advances. Obtain copies of the following documents in the Cash Converters Class Action represented by Ms McKenzie:
What do I need to do to be a part of the class actions?
You do not need to take any positive steps to participate in the class actions but you may wish to register your interest with Maurice Blackburn so we can keep in touch with you.
Fill in your details in the registration form, or call 1800 550 587 to register your interest over the phone.