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Thursday 20 July 2017

17-243MR The Rental Guys refund more than $100,000 to vulnerable consumers

The Rental Guys has paid $100,000 to regional customers after ASIC found they failed to meet their responsible lending obligations when renting white goods and furniture.

ASIC was concerned that The Rental Guys failed to make proper inquiries, conduct verification and carry out unsuitability assessments when entering certain customers into new contracts.

Under the new contracts, the customers, mainly from regional Indigenous communities in NSW, were charged higher rates and gave up their rights to own goods, that they had under their original contracts. 

The Rental Guys has 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. Eligible customers will still be able to claim a refund after this period.

ASIC Deputy Chair Peter Kell said, 'The law is clear when it comes to responsible lending and leasing. Proper assessments must be made into every customer's ability to repay their loan or lease without hardship.

'Customers should be confident that when they take out a lease, the lessor has done the work to ensure it is a lease they can afford.

'We will continue to focus on the consumer lease industry, because consumers, particularly vulnerable consumers who use lease essential products, should not be disadvantaged by rental companies' poor compliance.

'Customers of The Rental Guys between November 2013 and January 2014 who have not already received a refund should contact them on (02) 6862 5055.

'If you think you are entitled for a refund from the Rental Guys, I urge you to contact them as soon as possible', Mr Kell said.

LawAccess NSW can provide free legal help and is available on 1300 888 529.

ASIC's MoneySmart website has information that helps consumers understand what they're signing up for when they rent things for their home.

Background

King Quartet Pty Ltd, trading as The Rental Guys, is a white goods and furniture rental company operating in the Parkes and Forbes region in NSW.

In November 2013, The Rental Guys purchased Country Rentals. The original Country Rentals contracts were credit contracts ('goods by instalments contracts'), customers would own the products once they had paid off the instalments.

At the time of purchase, The Rental Guys visited customers' homes to transfer Country Rentals clients to The Rental Guys business and asked customers to sign new consumer lease contracts. In doing so, The Rental Guys failed to undertake responsible lending assessments as required under the National Credit Act.

ASIC's Regulatory Guide 209 Credit licensing: Responsible lending conduct sets out practical guidance for lenders and credit intermediaries (including brokers) on how to comply with their responsible obligations.

This outcome is the result of work by ASIC's Indigenous Outreach Program (IOP), which is staffed by lawyers and analysts, the majority of whom are Indigenous.

ASIC's IOP supports Indigenous consumers to be confident when making financial decisions and dealing with financial services providers by supporting the work of financial capability workers and financial counsellors. ASIC offers a range of impartial and tailored consumer education resources for Indigenous Australians available on ASIC's MoneySmart website.

ASIC also offers a dedicated help line to assist Indigenous consumers with financial issues (Phone: 1300 365 957).

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Last updated: 20/07/2017 12:00