Australia's largest second-hand dealer has been accused of thriving on people's desperation and turning a blind eye to the selling of stolen goods.
Drug addicts and a former Cash Converters employee say the company, which has 140 stores across the country, is frequently used by addicts as a way of funding their next fix.
A Brisbane man, who asked to be called 'James', has used the company at least 50 times to get money for drugs, predominantly relying on its pawnbroking service to hock stolen goods.
James has been doing speed and cannabis for eight years - on a daily basis for the past four years - and says there were periods when he was selling to Cash Converters up to three times a week.
He and his friends would steal garden equipment and drive it to their nearest store to cash in.
"We used to get mowers and whipper snippers from people's garages because you get $150 straight up for them," he said.
He says the owners would be unlikely to notice the items stolen on that day and would be less likely to have serial numbers to report to police.
"I didn't really want to use [Cash Converters] because they don't pay you much, they're a last resort, people just go there because they're easy," he said.
"There's no stuffing around, you don't have to call people or go to people's houses to try and sell something, you can just go straight to them and get your money, just show a licence and that's it pretty much."
James says every person he knows, who has been or is involved with drugs, has used Cash Converters to fund their addiction at some point.
But he says most addicts only use the company for drug money when they are desperate.
"It's good for people with drug addictions, they're open nine 'til five, but the amount of interest they can charge is as bad as someone that sells drugs," he said.
"They're as bad as a dealer, they're worse nearly because they're a business that lives off junkies, and some people that can't pay their debt to Cash Converters have to do worse things just to pay them back."
His friend, 'Mark', who has also been using cannabis for eight years, says he loaned his PlayStation 3 to Cash Converters because he needed money for drugs.
The PS3 cost him about $1,000 and he says he got $200 for it from Cash Converters and then had to pay almost twice as much to buy it back three months later.
James feels that company staff are aware of the issue.
"I think they know they're dealing with drug addicts just from the look of people," he said.
"Pretty much every time you go in there, in the selling section, all there is is junkies or suspicious-looking people."
A former Cash Converters employee, who worked in a Queensland store, says staff know customers are selling stolen goods for their drug addictions.
"I think that would be a yes for almost anybody who ever worked at Cash Converters," he said.
"You know when people are bringing in weird things and they're coming in daily and stuff is brand new and in the wrapper that it's probably a bit suspect where it's come from.
"The fact that people are relying on selling goods as a source of daily cash then that probably does point to drug use. That's something that anybody who works in buys and loans would probably get a feel for."
He says the company's database is linked with police, which means when an item's serial number has been reported stolen, the police will be made aware of it.
"In that instance it's actually Cash Converters that loses the money," he said.
"Cash Converters does put a bit of pressure. If your goods are getting seized by police and the profits that you're trying to make the company are falling, then they're going to come down on you.
"A sales person's performance is constantly monitored and it's quite a competition. People want to have good marks with the company to try to keep bosses off their back or move up."
As well as buying and selling items, Cash Converters also provides cash loans. Its short-term loans attract a fixed charge of $35 per every $100.
The general manager of Cash Converters in Australia, Ian Day, says what customers do with the money it gives them is their choice.
"We provide a service that helps thousands of people with their short-term cash needs every week, literally hundreds of thousands of people every year," he said.
"Like every lending institution though, the cash that we do lend is used for a variety of reasons that falls to the discretion of the customer. We don't take the role and we don't expect our staff to take the role to get behind the reasons why people use our services."
He says the company has stringent processes in place to ensure it is not buying stolen goods from sellers.
Customers are required to complete a statutory declaration, which says they have right of ownership for an item they are selling and they must have 100 points of ID.
He says cameras are also installed in stores to photograph people completing transactions for any policing which might later be required.
"By law we are required to record all details of products that are either pledged to us for a loan or offered to us for sale," he said.
"These details are then regularly uploaded to police databases for cross checks. If goods are identified as stolen then they are seized and the customer is contacted by police for questioning."
Mr Day acknowledges that Cash Converters provides an easy service for customers, with a relatively high interest rate.
"We do provide an easy service for customers to be able to sell products to us or to borrow money from us, using pawnbroking loans or a variety of other short-term loans," he said.
"They are high cost, relative to other mainstream providers, but the simple fact is that mainstream providers, like banks, aren't interested in lending someone $100 and they're certainly not prepared to accept a television or a DVD as security to provide that $100 because of high risk."
Mr Day says Cash Converters has experienced a spike in customers during the global financial crisis. Its net profit is up 6.5 per cent to $16.2 million in the 2008-2009 financial year.
"Banks have tightened up on their lending incredibly over that global financial crisis period but there's always people looking for short-term cash and who have a need for that," he said.
"So provided people meet our criteria we're prepared to take that risk. I'd like to think with the hundreds of thousands of customers we deal with every year that we get it right most of the time."
The Australian Institute of Criminology's Jason Payne says while this may be the case, studies show a definite link between crime and pawnbrokers and that more could be done.
He says one study conducted by the New South Wales Bureau of Crime Statistics and Research found roughly 50 per cent of people surveyed reported using legitimate businesses, including pawnbrokers, to sell stolen goods.
He says a more recent study done by the University of Western Australia's Crime Research Centre found about 10 per cent of criminals surveyed used a legitimate business to dispose of stolen goods.
"I don't think there's any doubt that the literature for years has shown a link between excessive drug consumption and the inability to fund that drug consumption through legitimate means, and then the resorting to property crime or other types of crime to fund a drug habit," he said.
"That is driven by the desperation for the need to maintain a habit, and where there are no other alternative avenues for disposing stolen goods, then they may use legitimate businesses, like pawnbrokers, to dispose of those things they can't get rid of ordinarily."
He says it is a problem which could be addressed further.
"There is no doubt that all of the research to now has suggested that to some degree people report using legitimate businesses," he said.
"So clearly there is a group of drug-using or property offenders out there using legitimate business to get rid of stolen goods. That indicates there is an area where crime prevention could be having an additional impact."
In the lead up to Christmas in the United Kingdom, police have been installing undercover officers in Cash Converters stores in an effort to crack down on thieves and drug users.
"Perhaps if there has been some positive results from doing that kind of work then maybe that would be one way of going, having the law enforcement agencies targeting in on that part of the market," Mr Payne said.
By Amy Simmons
December 1, 2009
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Cash Converters 'thriving on junkies'