We take our responsibilities very seriously. The short term lending sector is covered by some of the most stringent regulatory rules of any industry, and we aim to serve all of our customers well, and try to assist with solving the circumstance that brought them to Cash Converters.
At Cash Converters, we have no interest in providing a loan that cannot be repaid. Why would we? It could jeopardise the welfare of the customer, and it doesn’t make good business sense. Also, we’re obliged by law to ensure that the loan fits the need, that’s called our “Responsible Lending Obligation”.
We take careful note of each customer’s individual circumstances before we recommend a loan amount to ensure we don’t lend customers more than they can afford to repay. Doing this means we can ensure that we have responsibly catered for the needs of our customer.
We have very strict rules in place across the Cash Converters network to ensure that our customers are looked after. All Cash Converters Personal Finance Centres are networked, which means that they’re all hooked up to a central processing centre. This centre sets all of the rules and guidelines regarding lending policies and procedures, and they’re hard wired into a system which sits within every store’s Personal Finance Centre processing system.
How we determine your capacity to repay a Cash Converters loan
The first thing we need to do to ensure that a customer is able to obtain a loan, whether that is a Cash Converters Cash Advance, or a Cash Converters Personal Loan, is to work out what the customer’s income is. We need to know this so that we can determine how much the customer can afford to repay. To do this, we look at bank statements to determine the customer’s income level over a long period of time.
Just checking the last income statement or income payment is not enough. We also need to see what the customer’s regular income is. For example, the customer may have just received some over-time pay, but unless this is a payment that occurs regularly, we can’t include this as regular income. Over-time pay is considered to be a one-off payment and doesn’t give our Cash Converters Personal Finance team member a true indication of what the regular income is.
At Cash Converters, we want to help, and we have no interest in getting people into financial difficulty. By ensuring that a customer can afford to repay a Cash Advance loan or a Personal Loan, we’re helping them get on with life.
Why we want to see bank statements
One of the best ways for our Personal Finance staff to assess the capacity to afford a short term loan is to assess the amount of income a customer receives. The easiest way to do this is to examine bank statements which provide a clear and medium term assessment of income, and therefore the capacity of a customer to repay a loan.
Partnering with Government
Cash Converters has a long history of partnering with government bodies to shape policy outcomes that provide the best outcome for consumers. In the 1990s, Cash Converters pioneered many of the practices and policies of the second hand goods industry. You may not realise it, but years ago, when selling something second hand to a second hand goods dealer, you didn’t have to provide proof of identity – we had no idea who was a thief and who was a legitimate seller!
Back then, we partnered with the Police around Australia to introduce systems which firstly identified the seller, then logged all of the details of the item’s being sold. Now, every time that a product comes into one of our stores to be sold, not only do we know who’s selling it, and what they’re selling, but so do the Police.
All details of items sold and their seller are regularly uploaded to Police Databases nationwide and referenced in the event a member of the community has had items stolen.
There is the odd story about items being seized by Police from a Cash Converters store. The only reason this has occurred is because our system works so well. If an item is stolen and is then presented to a Cash Converters store, the Police will know about it and we’re happily involved in returning the goods to the rightful owner.
It’s ironic that Cash Converters has a reputation for accepting stolen goods, when in fact the systems we developed ensure that the products you see in Cash Converters stores are reliably sourced!
In more recent times, Cash Converters have been heavily involved in discussions with both State and Federal Governments about the need for reform in the short term, small amount lending sector.
This sector started to grow in the early 2000s, and with it came industry practices that failed to evolve at a rate consistent with the bourgeoning need for small amount loans. Unfortunately, some people fall prey to industry practitioners who do not really seek to assist, but merely to profit at the expense of the customer’s wellbeing. The result is that instead of helping, some lenders harm the very people who seek their assistance.
Cash Converters has been actively engaged in the debate regarding the regulation of the short term credit industry for a considerable period of time. We are by far the biggest short term lender in Australia, and you only get as big as we are by doing the job well.
We’re proud of the way that our business, including our network of stores and staff, work with thousands of people every day to help them with life’s ups and downs.
We have made several submissions to state and federal governments, and we have met hundreds of politicians, welfare sector representatives and others who like us, seek a well regulated industry that allows people access to short term finance in a safe and reliable way. That doesn’t mean that we always see eye to eye, but we do respect the fact that each party to a discussion has a valid contribution to make.
At Cash Converters, our approach to these responsibilities is simple; lead the debate with well sourced and valid information and offer regulatory options that protect consumers and their right to access credit, and help protect the community for rogue operators.