Customers who were ‘unfairly’ lured into paying inflated prices for leases on household goods through Radio Rentals will have their money reimbursed.
The company has been caught out for targeting ‘society’s most vulnerable’ and has been forced to repay nearly $20 million to the customers it left crippled in debt.
Thorn Group Limited, which operates the retail giant, will write off or refund $6.1 million in default fees and pay back $13.8 million in excess lease payments – of which $11.8 million has already been repaid, A Current Affair reports.
Radio Rentals has been caught out for targeting ‘society’s most vulnerable’ and has been forced to repay nearly $20 million to the customers it left crippled in debt
Customers including Lea Hearne (pictured) who have paid up to seven times the worth of the household goods they leased are set to be reimbursed by Radio Rentals
The mass refund came after the Australian Securities and Investments Commission raised the alarm about the company’s irresponsible lending practices.
It was found to target people with poor credit history who couldn’t pay for everyday household items upfront – with about half receiving welfare payments.
More than 60,000 leases taken out with Radio Rentals between January 2012 and May 2015 are due to be refunded.
A victim of the company’s harsh system was Lea Hearne, who began leasing a couch in 2014 for $45.99 a fortnight.
The mass refund came after the Australian Securities and Investments Commission raised the alarm about the company’s irresponsible lending practices
More than 60,000 leases taken out with Radio Rentals between January 2012 and May 2015 are due to be refunded
On signing the contract, the mother was under the impression she would pay the set amount for two years, but said she was still having to make payments in 2018.
‘I was really angry when I discovered I was paying $4000 for a $2000 couch,’ she said.
Another disgruntled customer said the company had unfairly taken aim at people who were not ‘well off’.
‘I think they’re going to have to look at a lot of areas because people don’t understand contracts and the fine prints,’ she said.
Maurice Blackburn is leading a class action on behalf of about 200,000 people who signed up to Radio Rentals’ ‘rent, try, $1 buy’.
Another disgruntled customer said the company had unfairly taken aim at people who were not ‘well off’
Maurice Blackburn is leading a class action on behalf of about 200,000 people who signed up to Radio Rentals’ ‘rent, try, $1 buy’
‘We want Radio Rentals to accept that they have mislead their customers, they have engaged in unconscionable conduct and that their contract terms are unfair, or at least many of them are,’ lawyer Ben Slade said.
‘The business model is an insidious evil and it must be stopped.’
Consumer Action Law Centre’s Katherine Temple slammed Radio Rentals for offering ‘dud deals’ and taking advantage of people at their most vulnerable.
‘So rent-to-buy companies have access to Centrelink’s bill-paying service, Centrepay, which means that they get first dibs on people’s welfare payments to make these lease repayments,’ she said.