For the second time in weeks, the Australian Securities and Investment Commissions (ASIC) has taken action against and slammed the franchisees of Mobile Rentals for breaching consumer credit laws.
ASIC has now cancelled the credit licence of the all the franchisees’ directors of the Victorian-based household goods rental provider, which will disallow them from engaging in any credit activities for three-and-a-half years.
According to ASIC, based on a review of consumer files of the franchisees, the majority of which were unlicensed, found they took none of the required lending steps when they entered into rental agreements with consumers.
“The targeting of poor and vulnerable consumers by rogue operators will not be tolerated,’ ASIC deputy chairman Peter Kell said.
The franchisees operated out of Geelong, Ballarat and metropolitan Melbourne including Broadmeadows, Glenroy, Preston, Thomastown, Werribee, Frankston and surrounding areas.
Earlier this year, ASIC banned director Ajay Kaushik from the credit business for five years for disregarding responsible lending laws.
Consumers have also been released from their obligations under the contracts and now own the goods.
“Whether you are operating in city centres, or targeting consumers in remote Indigenous communities, if you are signing consumers up to rental agreements they don’t understand or they can’t afford, ASIC will hold you to account,” Kell said.
This case follows similar moves against Zaam Rentals’ franchisees.
The Franchise Council of Australia has warned these breaches are a friendly reminder for franchisees take on extensive research before committing into a business.
“It’s really important to seek out businesses that have invested in their own sector,” FCA general manager Kym De Britt said.