In relation to Radio Rentals.
The Federal Court of Australia has ordered a $2 million penalty against Thorn Australia’s Radio Rentals for contravening its responsible lending obligations.
In handing down the penalty, the Court found that Thorn failed to make the necessary inquiries and take steps to verify the financial situation of its customers, and failed to conduct a proper assessment of the suitability of the leases it provided.
This outcome follows an investigation by ASIC into Thorn’s leasing practices, focusing on whether people signing up to the leases had the capacity to pay. The breaches relate to more than 270,000 leases entered into between January 2012 and May 2015.
Thorn will also be paying ASIC’s court and investigation costs of $240,000.
ASIC deputy chair, Peter Kell said, “This penalty reinforces the need to uphold high standards of conduct in the consumer leasing industry. The law requires lenders to verify a consumer’s financial situation to make sure that consumers are not being put into unaffordable loans or leases.”
In a statement to the ASX, Thorn Group said, “Thorn co-operated at all levels of ASIC’s investigation and in 2017 rolled out an industry-leading credit assessment system. Thorn has begun contacting customers as part of its remediation process pursuant to the Enforceable Undertaking agreed with ASIC.”
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.