Financial Rape of Australians by Wallet Wizard, Cash Converters and Loan Ranger: Peter Pilt’s Thoughts.


 

Maybe if you are reading this you are considering taking out a “payday” loan with Wallet Wizard, Cash Converters or the Loan Arranger. I want to be blunt here. These companies are financial bloodsuckers that prey on your desperation. Do everything in your power to not take out a loan with these companies.

Nimble also fits into the blood sucking category. To read my blog dedicated just to Nimble Click Here

I have worked through an example of borrowing $1000 from each company and let me summarise the results before giving the details.

  • Cash Converters charges the equivalent of an annual percentage rate of 68% but is possibly as high as 76.8% – its a little ambiguous.
  • Wallet Wizard charges the equivalent of an annual percentage rate of 69%%
  • Loan Ranger charges the equivalent of an annual percentage rate of 56%

This is simply financial rape. This simply is preying on the poor and vulnerable. It is outright exploitative….

Whenever is a 70% interest rate justifiable? Why does the Australian Government allow the operation of Loan Sharks within it’s borders. For the record the highest interest rate legal under Australian law is 90%. What is that about????

Now I understand that people who take these type of loans often have a poor credit reference rating and are therefore the loan must carry a risk loading. But considering an unsecured personal loan from an Aussie bank is sitting about 13% how do these companies justify a 57% risk loading?

It simply is not right.

And if you are looking at using one of these companies or similar I would strongly encourage you to look for alternatives including the program called NILS – No Interest Loan Schemes:- Click here for the NILS Website 

Here are the details of the examples I worked through.

1) Wallet Wizard

If you borrow $1000 from Wallet Wizard you will repay $211.67 per month for 6 months. See Image 1

This is a total repayment amount of $1270.02 which means you paid $270.01 in interest.

Plus as the second image  shows you will have paid a $45 application fee and a $1.15 per week ‘service fee’: Which all up totals $74.90 for the example we are working through.

So $270.01 + $74.90 = $344.92

or 34.5% over 6 months or annualised to 69%

 

12498705_954829581219555_670222168_n

 

12527663_954829561219557_172497435_n

 

2) Cash Converters

If you borrow $1000 from Cash Converters, you would pay back $680 over and above the original $1000 which means you have paid the equivalent of a 68% interest rate. Now if you look at the image below you will see they are saying that the average loan repayment is $34 per week  over a year. Well if you work that out 52 X 34 it equals $1768 which would make the interest rate 76.8%.

12506583_954830111219502_105252849_n 

3) Loan Ranger

With the Loan Ranger they charge you an up front fee of 20% of the principal and then a 4% fee per month. So 20% plus the 4% per month works out at approximately 56%.   20% + (4% x 12)= 56%. Now this isn’t entirely right as the 4% would be reducing each month so in the interest of being fair it probably is more like a 50% interest rate instead of 56%. However if you are late with a payment they charge you a fee of $38.50. Still exorbitant in any one’s world. 

 

12511633_954829904552856_1951555893_n

12506965_954829637886216_87620127_n

 

Reality is that these finance companies are nothing more than Loan Sharks who prey on the financially weak and financially vulnerable. As a Pastor I look  in the bible to where the Prophet Amos was chastising the Nation of Israel for exploiting the poor whilst they enjoyed unprecedented prosperity. I wonder what Amos would say to Australia as a nation as we sit back and silently allow this exploitation of people in financial trouble.

Anyway that’s what I think.

You may also be interested to read some other blog posts about money that I have written:

Ps Peter Pilt

For the record: Global Care, the organisation I work for, runs several significant NILS operations.

If this Blog has been helpful, informative or inspirational to you, please feel free to share it on Facebook or Twitter. Email Subscriptions to my blog are welcome or you can contact me through Facebook (facebook.com/peterpilt),  Twitter (@PeterPilt) or Insta (@PeterPilt). Have a great day.



Categories: Australian, Current Affairs, Financial

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , ,

15 replies

  1. Hey peter you underquoted wallet wizard. In your second photo it shows that loans under $2000 incur an application fee of 15% not just $45 as you have calculated. Therefore on $1000 loan the application fee would be $150!!! Plus the service fee is 2% p.m. ($20p.m) not $1.15p.w. (~$5p.m.).

  2. Absolutely agree. I can’t believe these companies (and similar smaller ones in my area) are legal. They are loan sharks. My brother in law got stuck in a similar loan back in the USA and it took him more than 18 months to pay back a small loan. Why? Because when you are in enough of a state of poverty to consider one of these loans, your income is too low to be able to afford the monthly repayments. These people are criminals acting as corporations under Australian law. Something needs to be done about this.

  3. I can’t imagine why people get sucked into using them. Just wait until you have enough cash to buy these things you feel you can’t go without. Well that’s my opinion anyway

    • It’s not just people who get sucked in. Some people are so desperate for help that they dont have a choice. Im short of getting 4 weeks rent together so i can put a roof over our heads. I lost everything i had a year ago so , yeah. I’m getting desperate enough to consider it.

  4. You have to wonder where the money comes from in the first place. Money laundering as a result of drug deals, outlaw motor cycle gangs profiting in drugs and getting rid of the money this way…….. I always wonder about this when I see their tv commercials

  5. Get a life Peter. I would have been stick in some pretty bad places without these companies you speak so poorly of. For some, life does not go to plan and emergency funds are required to live. So sick of people like you being so judgemental. In fact I find the fees on these loans transparent unlike other banks and lenders. Yeah fees are high but so is the risk. Grow a brain.

    • We agree on something Jeremy. Both of us are sick of judgemental people. Like for example I find you comments judgemental and hypocritical because you accuse me of being judgemental but can’t seem to see you are doing the very thing you accuse me of.

  6. Thanks Peter, I appreciate your helpful insights and calculations (athough I had done the math recently myself too).

    It’s rare that someone goes to the effort of explaining things for the benefit of others, so thankyou again for your generosity and care – and your understanding and compassion for people who use these loans (such as me).

    Also thanks heaps for mentioning NILS – that looks like a lifeline for my family! Good other topics here too by the look of it, social analysis, biblical etc

  7. Basic maths is not your strong point. Perhaps you should employ an Editor for your writing

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: