A MAN who claims he was trapped in a debt nightmare after being recklessly granted dozens of payday loans has launched a legal challenge against Cash Converters.  

Disability support pensioner Ronald Hayes claims he was forced to rely on food handouts after he was given at least 64 payday loans in three years.  

The Consumer Action Law Centre says Australia's biggest short-term lender will be put under the microscope in the Magistrates' Court.

Mr Hayes alleges that two Cash Converters companies breached consumer credit laws.

But Cash Converters spokesman Glenn Donaldson said that the company would vigorously defend any allegations that it had engaged in predatory or unfair behaviour.

Mr Hayes says he had to rely on family, friends and charities for food as his pension was eroded by loan repayments.  

"Sadly, consumer organisations like ours see cases like this on a regular basis," Consumer Action chief Catriona Lowe said.  


"People take out a loan to help pay their bills, but when the repayments are direct-debited out of their account, they find they don't have enough money left to live off and they go back for another loan."  

The payday lending industry is fighting a Federal Government proposal for a cap on fees and interest.

Critics say that a typical payday loan has an annualised interest rate of more than 400 per cent.  

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That's criminal.

Well, in order to get those loans, he must have been able to prove that he could afford to repay them....

If he said that he could, when he actually couldn't, how is it Cash Converters fault???   ( other than not realising he hadn't repayed the last one)...

Annie Anthrax wrote on Oct 31^st, 2011 at 11:02am:


Not really......any short term loan has high interest, because they aren't measured over years, rather weeks or months...

Even a pawn broker runs at about 300% to 600%, because the term is usually 30 to 60 days....

Sir lastnail wrote on Oct 31^st, 2011 at 11:13am:


Have you ever applied for a loan, either short or long term, nails??

The first question they ask is "can you afford the repayments?"......the standard is that the repayments cannot be more than 1/3 of your income....

Even the Centrelink advances use that formula......and the rate is $75.00 per month on a $500 amount, repaid over 9 months (which means you repay $675.00)

Granted, the company shouldn't have allowed so many......if the situation is THAT bad, he must have defaulted on at least some of the earlier ones, or had trouble repaying them....

Annie Anthrax wrote on Oct 31^st, 2011 at 11:22am:



Yeah, maybe.....but still, why would you keep getting the loans if you have problems making the repayments??

Poverty is such a vicious cycle - poor people chase their own tails and end up paying more for many things that others take for granted...

Being late to pay utility bills attracts escalating fees and/or interest penalties - as does making small cash and eftpos withdawals...

Pre-paid phone and internet contracts typically cost much more...

Poor people don't have the cashflow to avoid interest on credit accounts - and/or pay day lending...

Poor people can't afford to buy and store food and other groceries in bulk to take advantage of specials - and often end up paying inflated prices at local shops...

Many poor people (those who can afford a car in the first instance) top their petrol tanks in small increments and only when the red light comes on - often when petrol is at its most expensive...

Most poor people either cannot afford insurance at all - or end up paying more for the 'privilege' of paying by the month...

All of this cumulative financial disadvantage places untold stress on individuals and families...

Equitist wrote on Oct 31^st, 2011 at 11:39am:



Yah, but let's not forget stupidity either....