Mr Rental responds to ASIC’s “interpretation” of unfair contracts

By Claire Reilly

Following news that ASIC has ordered appliance rental provider Mr Rental to refund customers over “unfair” contract terms, Mr Rental’s managing director, James Nixon-Smith, has issued a statement saying the issue was one of “interpretation”.

According to the Australian Securities and Investments Commission, Mr Rental’s standard rental agreement included a condition requiring customers to pay a fee if they chose to terminate their rental contract early. ASIC declared that this contract condition – known as the “Calculation Period Adjustment” – was “unfair” for consumers, and called on the rental provider to refund affected customers.

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In a statement to the media, Nixon-Smith said, “Mr Rental was originally of the view that the business was in compliance with the National Consumer Credit Protection Act 2009 and the National Credit Code but this was not the same interpretation as ASIC.

“We co-operated and worked constructively with ASIC to understand its position and following considerable consultation accepted ASIC’s interpretation in relation to our rental agreements,” he said.

“Mr Rental agreed to remove the Calculation Period Adjustment, refund customers that originally paid this and inform all customers of the changes. Mr Rental and/or its Franchisees will also apply for and obtain an Australian Credit Licence. This will enable Mr Rental more flexibility in its business model to meet ever changing customer needs. 

“The Calculation Period Adjustment is no longer part of our agreements and we have updated all of our documentation to reflect this change. Less than 5 per cent of Mr Rental’s customers were actually affected by this situation.

“The company has taken the necessary steps to ensure all parties are satisfied with the outcome and ASIC has acknowledged our willingness to cooperate.”

ASIC estimated that approximately 1,560 customers would be eligible for a refund, with the total compensation figure tipped to be “in excess of $300,000”.