ASIC acts on rent to buy advertisements

[box border=”full”]Dale Cleves Music Pty Ltd, trading as Winston Music, has stopped advertising its musical instrument rental agreements as ‘rent to buy’ following ASIC concerns it was misleading.[/box]

ASIC was concerned that:

  • the terms of the rental contract did not give consumers the right or obligation to purchase the instrument. Instead they provided that the consumer may make an offer to purchase the instrument which Winston Music may or may not accept, and
  • they incorrectly advertised these arrangements as ‘rent to buy’. Unless a consumer has a right or obligation to purchase the goods under a goods rental contract, it is misleading to advertise the arrangement as being ‘rent to buy’.

Winston Music responded to ASIC’s concerns and stopped using the phrase ‘rent to buy’ and ‘choose to purchase’ in its advertising, including in signage on its delivery truck, website, and its telephone on-hold system. 

Deputy Chairman Peter Kell said, ‘Consumers make day-to-day decisions based on advertisements they see, read and hear. They have a right to expect advertising that is not misleading in any way.

‘ASIC is closely monitoring this space, and we will continue to monitor it to ensure consumers are not misled when they are making a financial commitment’, Mr Kell said. 

Winston Music has published a corrective notice regarding the advertising on their website, and has also sent a copy of the corrective notice to current customers.

Any consumers who believe they have been misled by the advertisements should contact Winston Music on (08) 8276 9988.


ASIC has been monitoring the rental of household goods industry over the past few years as it been identified as a high-risk product for consumers who are often not aware of the type of contract they are entering into. 

ASIC has worked with industry in the first instance to effect change to businesses operations, including Mr Rental Australia Pty Ltd, who entered into an enforceable undertaking (EU) with ASIC under which it provided refunds in excess of $300,000 to approximately 1,560 consumers (refer: 13-022MR).

Some examples of recent ASIC actions involving misleading or potentially misleading advertising include:

13-177MR ASIC concerns prompt Woolworths to change insurance ads
13-176MR ASIC concerns see CBA and HSBC change advertising
13-152MR ASIC acts to improve consumer understanding of funeral insurance
13-112MR ASIC concerns sees payday lender change advertising
13-088MR Fair Finance Australia pays infringement notice penalty
12-198MR GE Money changes personal loan online advertising
12-197MR ASIC takes action on payday loan advertising
12-153MR RAMS changes advertising in response to ASIC concerns

ASIC’s MoneySmart website has tips on what to look out for in rent to buy deals.