Payday lender Cash Converters named and shamed in this year’s Shonky Awards
Each year consumer advocacy group CHOICE runs its Shonky Awards, highlighting the brands that are misleading customers through their advertising and products.
Taking out the award for Best Wolf in Sheep's Clothing 2016 was Cash Converters for indirectly promoting its payday loans on financial advice website Common Cents.
According to CHOICE at first glance, Common Cents looks just like any other website providing handy money saving tips, however “a closer look reveals that every tip on the site directs you to Cash Converters where you can be signed up for a crippling pay day loan.”
“So instead of saving a buck, you could be locking in a loan with a crippling interest rate,” explained CHOICE on its website.
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Not only does Cash Converters charge a 20% establishment fee when you take out a personal loan with the lender, each month over the life of the loan you’ll be charged a 4% monthly fee. According to CHOICE on a $2,000 loan you’ll end up paying $3,360 over a 12 month period, which equates to an interest rate of 68%.
Mozo’s database shows that this rate is more than 8 times higher than many of the cheapest personal loans in the market, with the lowest unsecured rate starting from just 5.99%.
“There's no such thing as something for nothing when it comes to branded content like this. Despite the handy tips about penny pinching and decluttering the garage, 'Cashies' would love nothing more than to load you up with some toxic debt.”
To see the other brands named and shamed in this year’s Shonky Awards visit the CHOICE website here.