Appliance rental franchise pays $257k for lending breach

Appliance rental franchise pays $257k for lending breach

Local Appliance Rentals (LAR) has paid $257,500 after ASIC identified concerns regarding LAR meeting its responsible lending obligations and its supervision of franchisees.

LAR provides consumer leases nationally through a franchise model, including in regional and remote areas of Australia such as the Tiwi Islands, Katherine, Broome and Thursday Island which have a high Indigenous population and limited options for purchasing household goods. LAR mainly leases household goods to low-income consumers, including those who receive payments from Centrelink.

A Court Enforceable Undertaking requires LAR to remediate affected consumers, appoint an independent compliance consultant, and pay a Community Benefit Payment of $100,000 to The Smith Family.

Three infringement notices totalling $157,500 were also issued for concerns relating to responsible lending failures following ASIC's review of LAR's consumer lease contracts. LAR paid these infringement notices on 27 September 2018.

ASIC entered into the EU and issued the infringement notices as it was concerned that low-income consumers often have little flexibility in their spending and may have to go without essential items or default on other financial commitments, including rent and utility bills, due to responsible lending failures by firms. LAR will provide remediation to affected consumers, including those who made excess payments or were charged excessive late fees.

https://asic.gov.au/

Appliance rental franchise pays $257k for lending breach