ASIC fines rental goods provider $27,500 for irresponsible lending

ASIC has issued an infringement notice and entered into an enforceable undertaking (EU) with a national rental goods provider after a surveillance found deficiencies in its operating and compliance practices.

Rent The Roo Pty Ltd (RTR) has paid a penalty of $27,500 after ASIC issued it with an infringement notice for a breach of the responsible lending laws under the National Consumer Credit Protection Act 2009 (National Credit Act). ASIC has also accepted an EU from RTR under which an independent compliance consultant will be appointed to review RTR’s policies and procedures.

ASIC was particularly concerned because RTR regularly deals with consumers who receive social security or government benefits as their only source of income, including Indigenous consumers living in remote locations who have limited access or exposure to other mainstream retail and/or credit services and whose first language may not be English.

ASIC’s surveillance found two credit representatives appointed by RTR under its Australian credit licence had failed to conduct proper verification of consumers’ financial situations before entering into consumer goods leases.

ASIC was also concerned RTR did not have proper systems in place to ensure its large network of representatives complied with the responsible lending obligations under the National Credit Act.

Deputy Chairman Peter Kell said, ‘Credit licensees have an obligation to ensure their representatives adhere to their licence requirements, especially when dealing with vulnerable consumers.’

The payment of an infringement notice is not an admission of a contravention of the National Credit Act. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain provisions of the National Credit Act.