ASIC issues $257,000 penalty for home-appliance franchise
A Queensland-based home-appliance rental franchise has been ordered to pay more $250,000 following an investigation from the Australian Securities and Investment Commission (ASIC).
Local Appliance Rentals (LAR) leases household goods such as computers, whitegoods and electronics to Australians on low-income wages and operates its franchise nationally, with outlets in regional and remote areas such as the Tiwi Islands, Katherine, Broome and Thursday Island.
ASIC expressed concerns over the company’s conduct, in regard to customer leases referred by its franchisees from April 2011 to August 2018.
The corporate watchdog found that LAR had contravened responsible lending obligations by failing to verify consumers’ financial situations.
Additionally, the franchise was found to have charged late fees in excess of those set out in lease agreements, and failing to adequately supervise its franchisees.
The resulting Court Enforceable Undertaking required LAR to remediate affected consumers, appoint an independent compliance consultant and pay $100,000 to charity, The Smith Family as a Community Benefit Payment.
A total of $157,000 worth of infringement notices were also issued following ASIC’s review of LAR’s consumer lease contracts, which ASIC reveals were paid in September.
The investigation highlights the role of corporate watchdog’s Indigenous Outreach Program, with many of the identified rural franchise outlets operating in regions that have a high-Indigenous population.
ASIC’s Indigenous Outreach Program supports Indigenous consumers to be confident when making financial decisions, in addition to working with Indigenous communities to resolve financial services issues and problems.