Following ASIC inquiry.
Rent to Own Appliances has been caught out by the Australian Securities and Investment Commission (ASIC) after charging customers annual interest rates as high as 208% for appliances and furniture. Annual interest rates for ‘rent to buy’ contracts are capped at 48% by law. As a result of breaching the National Credit Act, the retailer’s credit licence has been cancelled.
Rent to Own Appliances operated the website renttoownappliances.com.au and traded from Lilydale in Victoria. ASIC said S&S Enterprises, trading as Rent to Own Appliances, has agreed to stop collecting payments on all current contracts and let consumers keep those goods.
ASIC deputy chair, Peter Kell said, “Credit licensees must understand their obligations under the law and take compliance with those obligations seriously. This includes understanding the limits in the law about maximum interest rates. As this case demonstrates, ASIC will remove those licensees from the industry which fail to meet their obligations under the law.”
Rent to Own Appliances has agreed to maintain its membership with an external dispute resolution scheme, the Credit and Investments Ombudsman (CIO), for a period of at least 12 months.