ASIC has accepted an enforceable undertaking (EU) from Simply Energy Solutions Pty Ltd (SES). SES is in the business of marketing and installing solar panel systems to customers in Victoria and South Australia.
Between February 2014 and April 2015, SES marketed and sold solar panel systems that customers could either pay for up front or via a five year instalment plan. The price was the same whether the consumer paid up front or by instalments. However, in setting the price, SES built in a figure over and above the cash price for the goods.
The National Consumer Credit Protection Act 2009 (Cth) (National Credit Act) provides that where a person offers goods by instalment and the amount payable by instalments exceeds the cash price of goods, the person may be engaging in credit activities.
Initially, SES was of the view that it did not require an Australian Credit Licence (ACL) for the instalment plan it offered. However, after a change in senior management in 2015, SES reviewed its position and determined that it was engaging in credit activities and required an ACL.
The EU requires SES to:
- reduce the amount payable under the existing contract to the market value of the solar panel system
- refund any charge already paid by a customer with interest
- allow the customer to continue to pay the market value of the solar panel systems by way of instalments; and
- provide training to its employees and officers on compliance with the National Credit Act and Regulations.
SES notified ASIC of concerns that it may have breached provisions of the National Credit Act and provided assistance to ASIC in its investigation.
ASIC Deputy Chairman Peter Kell said, 'Businesses that provide goods on payment terms need to carefully consider whether there is a cost of credit built into the price. Where there is, they need to comply with obligations under the National Credit Act or partner with a licensed credit provider'.