Radio Rentals sued over irresponsible ‘Rent Try Buy’ contracts

A Victorian single mother of four children has sued Radio Rentals in the Federal Circuit Court alleging that six ‘Rent Try Buy’ contracts were irresponsible and unjust.

The woman, a victim of family violence, is also alleging that Radio Rentals:

  • did not adequately assess her financial situation before entering into each of the contracts and that the contracts were unaffordable; and
  • provided ‘consumer leases’, which gave her no right to own the leased items, when her purpose was to own the items.

“This family was struggling to make ends meet with the exorbitant repayments under these contracts,” said Lachlan Edwards, Solicitor at Consumer Action Law Centre.

The ‘Rent Try Buy contracts’, which included a fridge, lounge suite, washing machine, TV and computer, required the woman to repay approximately $18,452.72 for household goods allegedly worth $11,621.

“Currently, there is no limit on the amount of fees that a person can be charged under a consumer lease.

We’re concerned that too many families are suffering from financial difficulty after entering into high cost consumer leases,” Edwards said.

Consumer Leases have come under the spotlight in the recent Small Amount Credit Contract Review. The Federal Government has accepted many of the Review’s recommendations to better regulate the sector, and Consumer Action is urging parliamentarians that these reforms be implemented as soon as possible.

‘The government needs to legislate the Review’s recommendations as a matter of urgency, particularly the Review’s call to impose cost caps on these dangerous credit products,’ said Edwards. ‘These reforms would help to ensure that other Australians do not suffer in the way that this family did.’

Consumer Action is not able to comment further on these proceedings at this time. This client is not available for comment.

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