Today, the corporate regulator ASIC announced it is taking action against consumer leasing giant Radio Rentals after the company admitted to breaching responsible lending laws.
ASIC has lodged civil penalty proceedings with the Federal Court of Australia seeking a penalty of $2 million for the breaches, which relate to over 270,000 leases entered into between 1 January 2012 and 1 May 2015. ASIC has also accepted an Enforceable Undertaking (EU) that requires Radio Rentals to refund or write-off approximately $6.1 million in default fees and charges.
Consumer Action is warning financial counsellors and community workers that affected customers are likely to be entitled to further compensation than the refunds on offer.
If someone has a Radio Rentals lease that they have struggled to repay, Consumer Action encourages them to seek additional compensation from Radio Rentals. If they are unhappy with Radio Rentals’ response, they can contact the Credit and Investments Ombudsman to make a complaint.
Legislation is due to be introduced in 2018 to reform the consumer leasing industry, which would include limiting consumer lease repayments to 10% of a person’s net monthly income.
Financial counsellors and community workers can help by contacting their local MP and expressing support for the changes to consumer leases. Victorian workers can contact Consumer Action’s Worker Advice Line for assistance with Radio Rentals matters.