ASIC accepts enforceable undertaking from Queensland credit provider

by AB10 Oct 2013

ASIC has accepted an enforceable undertaking (EU) from Brett Morgan, a director of Rent the Roo South Brisbane Pty Ltd, trading as Home Zone Rentals.

The regulator was concerned that Home Zone Rentals was providing household items under a ‘rent to buy’ arrangement, although neither Home Zone Rentals, nor its directors, were at any time licensed to engage in credit activity.

ASIC was also concerned that Morgan had drafted terms into the lease which were designed to avoid the effect of the National Credit Code under NCCP.

Under the EU, Morgan has agreed to refrain from engaging in credit activity for three years including not applying for an Australian credit licence or becoming a credit representative of a credit licence holder.

Home Zone Rentals was formerly a franchisee of the national franchise group Rent the Roo Pty Ltd. This franchise agreement was cancelled on June 30, 2010 and there was no further association between the two.

ASIC is responsible for regulating the provision of consumer credit in Australia under both the National Credit Act and the Austrailan Securities and Investments Commission Act 2001, which includes the Australian Consumer Law as it applies to financial services such as credit contracts and consumer leases.

The National Credit Act regulates most consumer leases. Generally, individuals who enter into consumer leases are required to hold an Australian credit licence.