Two class actions are being filed in the Federal Court on Thursday on behalf of about 50,000 Cash Converters customers in NSW.
But the company says the numbers seem vastly inflated, as it has just 18 stores in NSW and has only been lending money in that state for three years.
It also said it is confident its fees have been applied lawfully.
Law firm Maurice Blackburn alleges the company exploited thousands of financially struggling customers by imposing charges far above the 48 per cent interest rate cap that exists in NSW.
Julie Gray, a pensioner and grandmother from western Sydney, is leading the class action.
“I was desperate and needed cash to get by, but Cash Converters took advantage of me like they take advantage of lots of people,” Ms Gray said.
“Someone has to stand up and make this company accountable.”
Cash Converters allegedly charged up to 633 per cent interest on short-term personal loans, when the value of fees was included in the calculations, Maurice Blackburn said.
Cash Converters says the fees in question, which are no longer charged after changes to legislation on July 1, 2013, were properly levied and were completely lawful.
“In the opinion of the company the action is based on a flawed proposition and will be defended,” it said in a statement.
Cash Converters is a franchised retail network with more than 700 stores worldwide.
Shares in the company fell by as much as nine per cent on Thursday, but had recovered some ground to be down seven cents, or 5.6 per cent, at $1.19 at 1350 AEDT.