When Janene Thacker received an e-contract in exchange for a new household item, she said the cost often went “right over” her head.
“At first you don’t think about what you’re going to pay,” she said. 7:30 a.m..
With limited savings, this disability pensioner used appliance rental stores for decades, unable to purchase goods directly.
As of February 2021, it was a $4,056 living room. In September, it was a tablet for her mother for $1,586, and in November, it was a refrigerator, for $6,240.
Filling her house with furniture and appliances made Mrs. Thacker feel like everyone else.
“I felt like I was up there for a little while, you know what I mean?” she says.
Last year, another device rental company, Rent4Keeps, hired Ms. Thacker for a Samsung S21 phone. The mobile cost around $1,800, but she had to pay $6,760.
“They may be brand new products, but you’re paying four times as much to acquire them, so how can these companies get away with it?” » asked Ms. Thacker.
Businesses would take fortnightly payments from Ms Thacker’s Centrelink benefits through a government-run service, Centrepay.
The online tool is an automatic bill payment service linked to a customer’s Centrelink account.
An approved provider contracts directly with Centrepay’s 600,000 monthly users, collecting refunds before the money hits their bank account.
“More and more predatory practices”
The Howard government introduced Centrepay in 1999 to enable Aboriginal communities to pay for housing costs such as rent. It was later expanded to other retailers.
It is the same service used by the now-bankrupt Youpla funeral insurance group, which has taken $174 million from its Indigenous customers since 1992 and became a Centrepay provider in 2001.
“People are going into it on blind faith (thinking) that because it’s Centrepay approved, it’s an ethical business and they’re going to be treated fairly,” AnglicareNT financial advisor Caitlin Bender said.
“We are seeing more and more predatory practices emerging in what was initially designed to be a really safe model.
“It is unacceptable.”
For Ms. Thacker, more than a third of her biweekly disability pension of $971.50 went to appliance rental companies. She quickly found herself in financial difficulty and fell behind on her rent payments.
“I was already in contracts and there was no going back,” she said.
“I really felt like I had no other choice: that I had to continue making my payments.
“It was a real headache…do I feed myself? Do I feed my animals? Do I pay rent? What should I do? I’m stuck.”
ASIC sues Rent4Keeps
In April 2022, ASIC announced that it was taking legal action against Rent4Keeps Australia, as well as its Victorian franchisee, for alleged breaches of the Credit Act.
The corporate regulator collated Rent4Keeps customer data over a three-month period in 2019, which showed the appliance company closed 533 contracts worth more than $1.8 million.
ASIC’s statement said 92 per cent of customers were Centrelink beneficiaries, 79 per cent were unemployed and all were financially vulnerable.
It accuses Rent4Keeps of operating a business model “designed to circumvent protections for financially vulnerable consumers.”
“Some customers have had to pay more than six times the retail value of the goods,” the regulator claimed of the Victorian franchise.
Another contract, another debt
Less than three weeks after ASIC’s announcement, NSW franchisee Rent4Keeps signed up Ms Thacker again. This time it was for a washing machine.
The 8kg Euromaid Toploader would cost him $2,340, more than three times the model’s retail price.
“I don’t think they should be allowed to do it,” Ms. Thacker said. “I don’t think they should be able to continue.”
7:30 can reveal the NSW franchise is run by the same person facing ASIC legal action: Melbourne-based businessman Kevin Payne.
Mr Payne operates Rent4Keeps Australia and replaced his wife Vikki as sole manager of the Victoria and NSW franchises in July last year.
“They are literally ripping people off and taking advantage of low-income earners,” Ms. Thacker said.
A lawyer for Rent4Keeps Australia and its Victorian franchise did not respond to questions about why its clients continued to operate in New South Wales, but said they would vigorously defend ASIC’s allegations at the hearing. a trial in February 2024.
Businesses ‘rip off’ consumers: WA senator
Mr Payne’s Victorian and NSW franchises are among 37 Rent4Keeps branches still registered as Centrepay providers across the country.
WA Labor senator Louise Pratt is calling on Services Australia, which administers the tool, to step up its oversight.
“It’s high time they swooped in and cleaned up all the businesses within Centrepay that are ripping off consumers,” she said.
Services Australia said at 7:30 p.m. it was unable to comment on individual businesses or those facing ongoing legal proceedings, but was “working across government to root out predatory behavior to ensure that Centrepay can continue to function as a useful budgeting tool.”
In September, financial support service Moneycare helped Ms Thacker get her remaining debts canceled.
The appliance rental companies kept more than $14,600 that she had already paid them.
“I thought they were helpful to me,” Ms. Thacker said. “(But) since I’ve kind of been more aware…I’ve been angry.”
“These companies are literally getting away with doing this to innocent people…ruining people’s finances, ruining people’s lives.”