Online appliance and electronics retailer Snaffle is under legal fire from the Australian Securities and Investments Commission (ASIC), which alleges the company inflated product prices and charged unlawful interest under credit contracts.
The case concerns high-demand household items such as washing machines, refrigerators, and mobile phones.
ASIC claims that Snaffle’s pricing structure was designed to bypass the 48% Annual Cost Rate (ACR) cap mandated under the National Credit Code, resulting in customers paying significantly more in interest than legally permitted. In court documents, ASIC points to three contracts where the total charges allegedly ranged from 60% to 103% ACR.
The regulator also alleges that Snaffle failed to disclose the cash price of goods and the true cost of credit in those cases.
According to ASIC, up to 40,430 credit contracts may have used a flat interest rate applied to the total product price over the term of the agreement, instead of calculating interest on the declining unpaid balance as required. This practice could result in customers paying more than necessary over time for common whitegoods and electronics.
“ASIC alleges Snaffle charged customers a substantial markup on products, as well as a delivery fee they did not incur, operating costs, a profit margin and additional adjustments – all before significant interest was applied, resulting in an unlawful credit contract,” said Sarah Court, ASIC Deputy Chair.
“Credit providers must give customers a clear understanding of the financial obligation they are agreeing to when they enter any credit contract.”
Court also noted a shift in the household goods finance market. With many consumer lease providers exiting, some retailers have pivoted to other forms of credit that may carry increased compliance risk.
“Enforcement action against misconduct by credit providers and predatory lending is a key enforcement priority for ASIC and we will continue to hold to account any business that we consider has exploited consumers by breaching these important consumer protection laws,” said Court.
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