For the second time in as many weeks ASIC has taken action against the franchisees of household goods rental provider, slamming its irresponsible practices.
Earlier this year ASIC cancelled the credit licence of Mobile Rentals, a Victoria-based outfit, and banned director Ajay Kaushik from the credit business for five years for disregarding responsible lending laws; “Following this action ASIC undertook a surveillance of all Mobile Rentals’ franchisees and found that while they did not use one standard form of contract across the franchise, they still operated with the same disregard for the credit laws as the franchisor.
A review of consumer files of the franchisees, the majority of which were unlicensed, found they took none of the required responsible lending steps when entering into rental agreements.
The franchisees operated out of Geelong, Ballarat and metropolitan Melbourne including Broadmeadows, Glenroy, Preston, Thomastown, Werribee, Frankston and surrounding areas.
‘The targeting of poor and vulnerable consumers by rogue operators will not be tolerated,’ ASIC Deputy Chairman Peter Kell said.
The franchisees’ directors have been excluded from the industry by entering into written undertakings with ASIC stating they will not engage in credit activities for three-and-a -half years. Consumers have also been released from their obligations under the contracts and now own the goods.
Today’s action follows similar moves against Zaam Rentals’ franchisees. ‘Whether you are operating in city centres, or targeting consumers in remote Indigenous communities, if you are signing consumers up to rental agreements they don’t understand or they can’t afford, ASIC will hold you to account,’ Mr Kell.
The franchisees will write to all consumers telling them their agreements have been terminated, they do not owe any further money, and they now own the rented goods.
ASIC’s crackdown on responsible lending and credit laws has seen action taken against firms that failed to observe their obligations, including:
Channic and Cash Brokers