In October 2016, the Australian Securities and Investments Commission (ASIC) cancelled the Australian Credit Licence of appliance rental business, S & S Enterprises Pty Ltd, trading as Rent to Own Appliances.
ASIC found that Rent to Own Appliances had entered into contracts where it charged consumers an annual interest rate of up to 208%, higher than the 48% maximum interest rate allowable under Australian law.
A ‘rent to buy’ contract is an arrangement where you purchase an item (such as white goods, or a TV) by ‘renting’ the item over an agreed period. However, under these types of contracts you are not actually ‘renting’ the goods, but are making a commitment to buy them. At the end of the rental period, you may also be required to pay an amount to ‘purchase’ the goods from the supplier.
Consumer Credit Legal Service (WA) Inc. frequently assists consumers in disputes with businesses that engage in to rent to buy contracts.
‘Rent to buy’ can potentially cost you more in the long term than if you had saved to buy the goods.
You should check all the terms and conditions of any contract before signing, paying particular attention to interest, fees and charges. You are also encouraged to shop around for the most suitable deal.
If you are facing an issue with a rent to buy contract, or other consumer credit matter, you can call our advice line on (08) 9221 7066 for free, confidential legal advice.
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