Federal Court ruling paves way for class action against Cash Converters over personal loans
By court reporter Jamelle Wells
Updated 2 minutes agoMon 1 Sep 2014, 3:27pm
A Federal Court ruling has paved the way for a class action by 40,000 people against Australia's largest pawn broking service Cash Converters.
Two class actions have been filed in the Federal Court on behalf of Cash Converters customers in NSW.
Law firm Maurice Blackburn says the customers were charged illegal levels of interest of up to 633 per cent on personal loans.
Cash Converters denies the allegation and has applied to have the case struck out.
The company argued that its fees were legal and that western Sydney pensioner and grandmother Julie Gray - who is leading the class action - is not entitled to act on behalf of the other customers.
The full bench of the Federal Court comprised of Justices Jacobson, Middleton and Gordon allowed the Cash Converters application, but dismissed it with costs.
The customers are seeking about $40 million compensation and their case is expected to be heard early next year.
Since July 1, 2013, the interest rate cap on loans in NSW has been 48 per cent.
Outside court, Maurice Blackburn principal Ben Slade said the ruling was a victory for all class actions in Australia where one person lodges a case on behalf of others.
"It's been an issue causing concern for us for a very long time," he said.
http://www.abc.net.au/news/2014-09-...-class-action-against-cash-converters/5710914
Federal Court ruling paves way for class action
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