Radio Rentals’ $29 million mistake on rent, try, buy

3 September 2019
More than two years after being filed in the Federal Court, a consumer class action on behalf of vulnerable Australians trapped in unfair consumer leases, has secured a $29 million settlement.

Thorn Australia Pty Ltd, part of Thorn Group Ltd (TGA) which trades as Radio Rentals, has agreed to the class action settlement on behalf of customers across the country who claimed that the company imposed onerous and unfair terms on them in order to avoid the credit laws that are specifically designed to stop overcharging.

The result of the practice, the claim alleged, was that the company continued to charge customers well beyond the retail value of the goods – including via Centrepay deductions – with the consumer never getting ownership of the goods.

Rebecca Gilsenan, Principal Lawyer at Maurice Blackburn Lawyers, said the case was brought to achieve three primary goals – highlight the problem, hold the company to account, and compensate consumers who had been ripped off.

"This was a very difficult case to run, and a difficult case to win, but it was important that this case be brought to illuminate what goes on too often with businesses that deal with vulnerable Australians," Ms Gilsenan said.

"The case also highlights the importance of having a properly functioning class action regime because, without one, there is no way that vulnerable Australian consumers who were victims of exploitative lending activity would be able to take action to stop it occurring and recover some compensation.

"That is the stark reality in a situation like this. Without this action, the company would remain unaccountable, bad practices would not be forced to change, vulnerable consumers would continue to get trapped in debt and they would have no chance of recovering a single dollar or achieve any measure of justice."

The settlement terms will be put before the Federal Court for approval in the coming months, as is the usual practice for class action settlements.


Practice Areas: