Following ASIC investigation.
Thorn Australia has reached an agreement with the Australian Securities and Investments Commission (ASIC) that will see the Radio Rentals owner remediate certain fees and expenses, totalling $6.1 million, for consumers who entered into relevant leases from 1 January 2012 to 1 May 2015. Thorn will also pay a civil penalty of $2 million, subject to the decision of the Federal Court.
In March 2017, Sydney-based law firm, Maurice Blackburn, launched a class action seeking compensation for over 200,000 consumers who entered into ‘Rent Try $1 Buy’ leases with Radio Rentals.
In a statement to the ASX, Thorn said the repayments had been substantially completed and independently reviewed. The company also made a provision for the civil penalty and remediation in its prior year accounts.
In response to changing market and customer demands, legislative changes and the ASIC investigation, Thorn has made significant changes to the way it conducts its consumer leasing operations. The changes include:
- A new online credit application and assessment system
- Reduced pricing below pricing caps proposed by the Federal government
- A new plain English contract to be introduced in the first half of 2018
- An upgraded hardship policy
- A revised claims management policy
- A revised internal dispute resolution process
Thorn Group acting CEO, Peter Forsberg said, “I am pleased we have reached this resolution with ASIC and the changes we have made to the consumer leasing division put it on a sound footing to meet the needs of its customers and satisfy its responsible lending obligations.
“Thorn’s consumer leasing business is the largest in Australia and it is now positioned to strengthen its offering in this segment. Consumer leasing is an important part of the financial system, as research shows that 3 million Australians are excluded from the financial mainstream.”
The South Australian Radio Rentals brand is not associated in any way to Radio Rentals stores owned and operated by the Thorn Group in states other than South Australia. In South Australia, Thorn Group stores trade as Rentlo Reinvented.