By Claire Reilly
For the second time in as many weeks, an appliance rental provider has drawn the ire of the Australian Securities and Investments Commission, with ASIC regulator today announcing it has cancelled the credit license of Melbourne-based company Mobile Rentals.
According to a statement released by ASIC today, the regulator has cancelled the credit licence of Mobile Rentals Pty Ltd for “not ensuring responsible lending practices” and failing to meet its responsibilities under the National Consumer Credit Protection Act 2009 (National Credit Act). ASIC also banned the company’s director Ajay Kaushik from “engaging in credit activities for 5 years”.
ASIC found that, between 24 February 2011 and 5 August 2011, Mobile Rentals, “failed to keep adequate records of responsible lending assessments; did not make reasonable inquires about the requirements and objectives of those entering into contracts; did not make reasonable inquiries about, or take steps to verify, a consumer's financial situation; did not provide consumers with a credit guide; and did not make the necessary disclosures in the rental contract.”
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Speaking about ASIC’s continuing role in enforcing regulations under the Credit Act was ASIC commissioner Peter Kell.
“The responsible lending provisions are a key element of the national credit laws,” said Kell. “ASIC has been, and will continue to be, very active in monitoring compliance and investigating reports of breaches.
“Many consumers who entered into contracts with Mobile Rentals were on Centrelink benefits and I encourage any who have complaints about their dealings with Mobile Rentals to contact the Credit Ombudsman Service Limited on 1800 138 422,” he added.
“Consumers should be aware that any complaint must be lodged while Mobile Rentals is a member of this service. ASIC has required Mobile Rentals to maintain its membership of an external dispute resolution service for the next 12 months.”
Mobile Rentals advertises a range of products available for rent on its website, including whitegoods, gaming consoles, air conditioners, computers and home entertainment products.
In the Frequently Asked Questions section of the site, the company stipulates that fees can be paid either through Direct Debit or Centrepay (a free service that allows Centrelink customers to pay direct from their benefits). It also requires potential customers to provide four references from “2 friends and 2 family” as part of the application process.
Today’s announcement follows news last week that another Australian rental provider, Mr Rental, had been forced to repay customers who were affected by what ASIC deemed “unfair” rental contract terms. Mr Rental’s repayments, part of an enforceable undertaking with ASIC, are expected to amount to over $300,000.