Auto loans prove to be lemons
A NATIONAL network of used car dealerships broke credit laws by charging as much as 97 per cent interest on loans, the Federal Court has found.
Rent 2 Own, which had 21 franchises across the country and nearly 6000 loan contracts in place, contravened four provisions in the National Credit Code and three in the ASIC Act, the court ruled. Justice Andrew Greenwood determined that R2O’s directors, Paul Anthony Green and Timothy James Roberts, were “knowingly concerned” in breaches of both the credit code and the ASIC Act.
Mr Green had claimed it “came as a huge surprise” in March 2018 when the Australian Securities and Investments Commission showed three-quarters of a group of 142 customers had paid more than the legal limit of 48 per cent interest.
In reasons for his judgment published on Friday, Justice Greenwood said he did not accept Mr Green’s claim. “They were ‘his’ contracts (Mr Green’s) in the sense that they were based on his calculator,” the judge said.
A penalty is yet to be determined. ASIC wants fines applied. ASIC is also seeking orders stopping R2O Cars, Mr Roberts and Mr Green from engaging in credit activity.