Australian Debt Collector Cuts Ties with Payday Lenders

Published on:
14 June 2011 at 08:46 a.m. ET

http://www.insidearm.com/news/00001634-australian-debt-collector-cuts-ties-with-/

Prushka Fast Debt Recovery, one of the largest debt collection agencies in Australia, has recently cut ties to payday lenders in the country. Prushka’s managing director Roger Mendelson revealed the move in a recent interview with the Australian Broadcasting Corporation’s radio division.

Mendelson noted that the move was primarily a business one, saying that his firm averaged a 7 percent recovery rate on payday loans, which created margins that were too narrow to continue the work.

“We just cannot make any money out of that,” he said.

But Mendelson also noted that his company did not like some of the practices of the payday lenders and that pursuing the accounts had the potential to give his company a bad name.

“With certain of them [payday lenders] we did have ethical concerns when we found out that quite a few of them charge very substantial fees, well beyond the debt,” said Mendelson.

To listen to the entire interview, please visit http://www.abc.net.au/pm/content/2011/s3243732.htm