Qld Cash Converters action could net $30m

A class action against Cash Converters could result in up to $30 million worth of damages being awarded to Queenslanders allegedly stung by exorbitant and potentially illegal fees.

Between July 2009 and June 2013, the Cash Converters' business model demanded borrowers appoint a broker, which attracted brokerage charge of 35 per cent.

According to a class action filed in Brisbane on Thursday, this contravened a 2008 change to Queensland's consumer credit law, which required brokerage fees to be included in the contract's real interest rate.

It's claimed borrowers were essentially paying interest rates of up to 160 per cent when the legal limit was 48 per cent.

"The brokers that people were forced to go through was always a Cash Converters franchisee, or a Cash Converters-related company," Maurice Blackburn special counsel Miranda Nagy said.

"We say in the class action that the brokerage service was essentially illusory.

"But even if it was real, the brokerage fee did need to be taken into account in calculating the real interest rate."

Up to 30,000 Queenslanders may have been caught in the business model, which was dropped in 2013, and the class action could net up to $30 million in damages, Ms Nagy said.

The real impact on some Cash Converters customers was to force them into a debt spiral, she said.

Lead plaintiff Sean Lynch, a disability pensioner who took out three loans with the company's Goodna and Inala outlets during the relevant period, said he went to Cash Converters because he was "doing it tough".

"It led only to further problems when what I really needed was help," he said.

"When times are already tough, people like me need good advice and help."

Maurice Blackburn has called for anyone who may have paid the fees to contact it for developments on the case.

Cash Converters entered a trading halt on Thursday in response to reports of the class action.

"The trading halt will continue until Monday 3 August 2015," secretary Ralph Groom said in a statement.

"However, if the writ is launched prior to this date, the company will respond and lift the trading halt."