And remediate customers.
Local Appliance Rentals (LAR) has paid $257,500 after ASIC identified concerns regarding responsible lending obligations and supervision of franchisees.
LAR provides consumer leases nationally through a franchise model, including in regional and remote areas of Australia such as the Tiwi Islands, Katherine, Broome and Thursday Island which have a high Indigenous population and limited options for purchasing household goods.
ASIC investigated LAR’s conduct in respect of consumer leases referred by its franchisees during the period between April 2011 and August 2018 and was concerned that it:
- had contravened responsible lending obligations by failing to make reasonable inquiries or take steps to verify consumers financial situations;
- had inadvertently received excess payments from consumers in relation to their lease and charged late fees in excess of the amounts set out in the consumer’s lease agreement; and
- failed to adequately supervise its franchisees.
A Court Enforceable Undertaking requires LAR to remediate affected consumers, appoint an independent compliance consultant, and pay a Community Benefit Payment of $100,000 to The Smith Family.
Three infringement notices totalling $157,500 were also issued for concerns relating to responsible lending failures following ASIC’s review of LAR’s consumer lease contracts. This amount was paid on 27 September 2018.