Queensland-headquartered Rent 2 Own Cars, also known as R2O Cars, and its directors Paul Green and Timothy Roberts, face action brought on by ASIC, which has accused them of breaching the National Credit Code by charging customers more than the allowed maximums.
The company was used by a number of unspecified franchisees across Australia’s five largest states to purchase used vehicles under a hire-to-purchase style contract.
ASIC has accused R2O Cars of using “calculators” that improperly determined weekly repayment amounts, resulting in many of the businesses and their employees paying more than the maximum 48 per cent annual cost rate.
The regulator also alleged that R2O Cars failed to disclose the annual percentage rate it charged or the method used to calculate interest charges, as is required under the code.
ASIC is seeking financial penalties from the company, which could amount to as much as $500,000 for each contravention of the law, as well as orders for the company and its directors to be banned from engaging in credit activity for a period of time.
The case is due to be heard in the Federal Court in Brisbane on 12 September this year.
According to its website, R2O operates 17 branches across NSW, Victoria, Queensland, Western Australia and South Australia, including in a number of regional centres.
“Rent 2 Own specializes [sic] in saying ‘yes’ to people whom all the banks and finance institutions have said ‘no’. They understand that sometimes circumstances out of your control can make your credit rating or ability to repay an advance look dismal to lenders when applying for a car advance,” the company website states.
“A tailored rental system from Rent 2 Own is a genuine no fees, easy rental agreement – no charges are applied at all.”
R2O Cars has been contacted for comment.
ASIC said that anyone who believes they may have been overcharged by R2O Cars to contact the company directly, or failing that, lodge their concerns with the Australian Financial Complaints Authority (formerly the Financial Ombudsman Service) on 1800 931 678.