Consumer Action has made a submission to Commonwealth Department of Treasury on cost disclosure and termination fees in consumer lease contracts.
The submission argues that:
- there is no difference between a consumer lease which is structured and marketed as a rent-to-own arrangement and a credit contract;
- the purported benefits of consumer leases (compared to credit contracts) are generally non-existent;
- there is no sound argument why consumer lease providers should not have to disclose the cash value of goods for lease, the total value of the lease and a comparison interest rate;
- we do not support Treasury’s proposed formula for calculating early termination fees. We suggest the formula should be based on a pre-estimate of the lessor’s administrative and collection costs.
To read our submission, click here: Consumer lease reform.