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Wednesday 9 October 2013

13-270MR ASIC accepts enforceable undertaking from Queensland credit provider

ASIC has accepted an enforceable undertaking (EU) from Mr Brett Morgan, 43, a director of Rent the Roo South Brisbane Pty Ltd, trading as Home Zone Rentals.

ASIC was concerned that Home Zone Rentals was providing household items under a ‘rent to buy’ arrangement, although neither Home Zone Rentals, nor its directors were at any time licensed to engage in credit activity.

ASIC was also concerned that Mr Morgan had drafted terms into the lease which were designed to avoid the effect of the National Credit Code under the National Consumer Credit Protection Act 2009 (National Credit Act).

The National Credit Act provides important protections to people entering into consumer leases.

Under the EU, Mr Morgan has agreed to refrain from engaging in credit activity for a period of three years including not applying for an Australian credit licence or becoming a credit representative of a credit licence holder.

Download the EU


Home Zone Rentals was formerly a franchisee of the national franchise group Rent the Roo Pty Ltd. This franchise agreement was cancelled on 30 June 2010 and there was no further association between the two.

ASIC is responsible for regulating the provision of consumer credit in Australia under both the National Credit Act and the Austrailan Securities and Investments Commission Act 2001, which includes the Australian Consumer Law as it applies to financial services such as credit contracts and consumer leases.

The Australian Consumer Law deals with unfair contract terms in standard form contracts. It provides for unfair contract terms to be declared void and for compensation to be paid to those consumers who have suffered loss as a result of an unfair contract term.

The National Credit Act regulates most consumer leases. Generally persons who enter into consumer leases are required to hold an Australian credit licence.

For more information regarding consumer credit, visit ASIC's MoneySmart website.

Last updated: 09/10/2013 12:00