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ASIC action sees Indigenous consumers released from contracts

25 Oct 2013

A franchisee of a national household goods rental business has released Indigenous consumers from their contracts following an Australian Securities and Investment Commission (ASIC) surveillance for unconscionable conduct.

Mr Rental Port Augusta’s conduct included compelling customers to declare they were not drunk at the time of leasing the goods.

Mr Rental Port Augusta targeted Indigenous consumers in the Anangu Pitjantjatjara Yankunytjatjara lands (APY lands) in remote South Australia.

An ASIC surveillance found more than 40 consumers were asked to sign several documents together with a lease agreement, none of which were explained to them and included a customer declaration indicating they understood all the paperwork and that they were not intoxicated.

"It is completely unacceptable that these Indigenous consumers have been taken advantage of and subjected to such appalling practices," ASIC Deputy Chairman Peter Kell said.

"The majority of consumers in the APY lands are living on very low incomes, English is not their first language and they are not familiar with an indefinite lease agreement."

Following ASIC action, the consumers' agreements have been terminated, they owe no further money, and they now own their rented goods.

Mr Rental Port Augusta has provided an undertaking to notify ASIC and the Governing body of the APY Lands if they intend entering a remote or very remote Indigenous community in the future to sign consumers up to agreements.

It is not the first time the Mr Rental brand had come to ASIC’s attention. In February 2013 Mr Rental Australia Pty Ltd, which operates via more than 50 franchisees including Mr Rental Port Augusta, was prompted to pay back more than $300,000 to approximately 1,560 consumers following concerns over unfair contracts.

"ASIC’s message is clear: if businesses are employing dubious practices to target financially vulnerable consumers, ASIC will come after you," Mr Kell said.

Access the full media release.

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ASIC's crackdown on responsible lending and credit laws has seen action taken against firms that failed to observe their obligations, including:

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