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WHITE goods and furniture rental company, The Rental Guys, will refund regional customers $100,000 after the Australian Securities and Investments Commission (ASIC) found they failed to meet responsible lending obligations.
After purchasing Country Rentals in November 2013, The Rental Guys visited customers' homes to transfer Country Rentals clients to The Rental Guys' business and entered the existing customers into new contracts.
Under the new contracts, the customers, mainly from regional Indigenous communities, were charged higher rates and gave up their rights to own goods that they had under the original contracts.
So far, The Rental Guys have refunded most of the affected customers in cash payments or account credits.
After July 2017, unclaimed refunds will be paid to a community organisation to be approved by ASIC.
ASIC Deputy Chair Peter Kell says this type of deception is unacceptable considering how clear the law is around rental agreement contracts.
"The law is clear when it comes to responsible lending and leasing," says Kell.
"Proper assessments must be made into every customer's ability to repay their loan or lease without hardship."
"We will continue to focus on the consumer lease industry, because consumers, particularly vulnerable consumers who lease essential products, should not be disadvantaged by rental companies' poor compliance."
The outcome is the result of work done by ASIC's Indigenous Outreach Program which is staffed by lawyers and analysts, the majority of whom are Indigenous.
Business News Australia
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