New legislation aims to reduce reckless lending by retailers

By Keri Algar

SYDNEY, NSW: Within days of Harvey Norman announcing that it has extended its lending arrangement with GE Money, Radio Rentals' financial services company, Thorn Group, has received its licence under the National Consumer Credit Protection Act.

According to Thorn Group, the Act is intended to promote responsible lending by retailers so that consumers are only sold products and services suited to their needs and capacity to pay.

“We see responsible lending as a point of difference between Thorn and its competitors and it is an important component of our reputation built over 70 years as a provider of household goods,” said Thorn managing director, John Hughes.

Hughes told Current.com.au that Thorn has registered about 90,000 new customers in the last year, the vast majority of which are from Radio Rentals and Rentlo. The Group’s annual report reveals that revenue was up 14 per cent to $145.1 million for the last financial year.

“We particularly hope that the regulator has the resources and resolve to pro-actively ensure widespread compliance, especially in addressing the circumstance of businesses completely ignoring the legislation or claiming exemption through the sham of a lease of indeterminate length.”

Specifically, Thorn has suggested that during the past year, over 50 per cent of payment defaults relate to telecommunications providers and utilities, with the majority being in the telecommunications sector.
 

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