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15-141MR ASIC accepts EU from Amazing Rentals
ASIC has accepted an enforceable undertaking (EU) from consumer lease provider Amazing Rentals Pty Ltd, following an ASIC investigation into concerns about compliance with the credit legislation.
ASIC's investigation raised concerns that Amazing Rentals, which holds an Australian credit licence, had failed to comply with its responsible lending obligations, and that it potentially engaged in unconscionable conduct. ASIC also had concerns about Amazing Rentals compliance with general conduct and record keeping obligations in the National Credit Act.
Amazing Rentals offers consumer leases for household goods through three stores in Darwin, Toowoomba and Caboolture. ASIC found that, of the customers of the Darwin Store:
- the majority received Government benefits as their only source of income
- they included Indigenous Australians, living in regional or remote locations, who had limited access or exposure to retail and/or credit services
- for some consumers, English was not their first language, they could not read or understand the contracts they were entered into, and they did not understand that they were signing up to a rental contract rather than a contract to purchase the goods.
ASIC has accepted an EU which requires Amazing Rentals to:
- cease operations from the Darwin Store for a minimum of 12 months
- terminate all consumer leases entered into at the Darwin store during the period 8 October 2011 to 26 May 2015
- cancel any payment arrangements in relation to those consumer leases and transfer ownership of the goods to the consumers
- refund to 34 consumers all credit charges (the difference between retail and lease cost)
- pay a total of $10,000; consisting of a payment of $5,000 to the North Australian Aboriginal Justice Agency and a further $5,000 to Top End Women's Legal Service for the purpose of funding ongoing civil legal advice and services to Aboriginal consumers in the Northern Territory
- engage an independent external compliance expert to conduct an assessment of, and report to ASIC on Amazing Rentals' policies and procedures to ensure compliance with the credit legislation in relation to its responsible lending and documentation obligations, and make any recommendations about required changes.
Deputy Chairman Peter Kell said 'Consumer lessors, large or small, are on notice that they must lift their game to comply with their responsible lending obligations. This instance with Amazing Rentals shows ASIC will not hesitate to take action against lessors that ignore their obligations.'
This work continues ASIC's crack down on consumer lessors who do not comply with their obligations under the law. ASIC has previously achieved the following outcomes:
- Make it Mine Pty Ltd (refer: 15-093MR)
- Rent the Roo Pty Ltd (refer: 13-301MR)
- Mr Rental Australia Pty Ltd (refer: 13-022MR)
- Zaam Rentals Pty Ltd (refer: 13-235MR)
- Ray Rentals (refer: 13-207MR)
- Mobile Rentals Pty Ltd (refer: 13-245MR)
ASIC will continue to take action in relation to breaches of the law by consumer lessors, particularly where we have concerns about breaches of the responsible lending requirements, and conduct in breach of the consumer protection provisions.