media release (14-021MR)

Unlicensed rental companies enter into enforceable undertaking with ASIC


ASIC has entered into an enforceable undertaking (EU) with Home Essentials Australia Pty Ltd, I Love My Water Pty Ltd, Triple Bay Group Pty Ltd and Triple Bay Pty Ltd, and the companies' principals, Daniel Tarabay, Teddy Tarabay and Ronald Carabay, after an investigation found they engaged in unlicensed credit activities.

The companies and principals have also agreed to make a payment of $250,000 to be split equally between the Pilbara Community Legal Service and the Indigenous Consumer Assistance Network. The money will be used to continue the work of educating and advising consumers on financial products and dealings with financial services providers.

ASIC’s investigation found the four businesses were involved in the hire and sale of water coolers and first aid kits using 'rent to own' agreements. They were marketed to consumers by door-to-door sales representatives, in many cases to vulnerable consumers, including those living in remote areas such as the Pilbara region in Western Australia. Consumers around Australian entered into around 16,000 rent to own agreements.

ASIC also found the prices paid by consumers for the goods exceeded their fair market value, meaning the agreements they entered into were credit contracts. This activity required the companies to be licensed under the National Credit Act.

ASIC was concerned that:

  • the companies continued to engage in credit activities while unlicensed, despite being told by ASIC of the need to be licensed

  • the companies engaged in unconscionable conduct when dealing with vulnerable consumers, including Indigenous consumers in remote communities, and

  • the rent to own agreements contained unfair terms which provided an automatic rollover of the rental term unless the consumer took steps to cancel the contract.

Under the EU, the companies and principals have agreed to take the following steps for the benefit of affected customers:

  • stop collecting payments owed by customers under existing rent to own agreements

  • allow customers to keep the goods they were renting with no further payments required

  • not exercise any rights they have under rent to own agreements, except to honour any contractual or statutory warranties to which customers are entitled, and

  • provide refunds to customers who have made payments under a rent to own agreement but not received their rental goods, which are expected to total approximately $100,000.

The companies and principals have also agreed:

  • not to engage in credit activities or apply for a credit licence for a period of 5 years

  • to place public notice advertisements in various newspapers around Australia, and the websites and, informing the public of the EU, and

  • to engage an independent consultant to oversee and report to ASIC on their compliance with the EU.

Deputy Chairman Peter Kell said, ‘The national credit legislation provides important safeguards for consumers. Ensuring that businesses comply with the licensing regime is the first line of defence for ASIC in protecting the interests of consumers. The credit legislation has now been in place for a number of years and, as the outcome of this matter demonstrates, those who engage in credit activities no longer have any excuse for not complying with the licensing requirements.

‘This case also represents an important outcome for ASIC in its efforts to protect vulnerable consumers from businesses that do not operate within the bounds of the law. In this matter, we saw the use of unconscionable and unfair practices and the targeting of consumers in remote areas who have limited access to financial products and services. It is vital that these consumers are afforded their full rights under the law by those who wish to do business with them’.

ASIC's MoneySmart website has further information on rent to buy agreements.

Download the EU

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