Two former directors of Rent 2 Own Cars Australia Pty Ltd have been ordered to pay a combined penalty of $228,000, after an earlier finding that they were involved in illegally providing high-cost credit to buyers of used cars.
The Federal Court ordered that Paul Green and Timothy Roberts pay $138,000 and $90,000 respectively, and imposed injunctions restraining them each from engaging in credit activity for three years.
“As directors of Rent 2 Own Cars, Mr Green and Mr Roberts were involved in their company misleading consumers about the true cost of the credit they were receiving, with some consumers being charged interest rates significantly higher than the 48% per annum statutory maximum,” ASIC deputy chair Sarah Court says.
“This conduct continued after Mr Green was put on notice, by ASIC, of concerns about the conduct. As today’s outcome demonstrates, directors of credit providers who turn a blind eye to the risks of their company’s credit contracts misleading consumers as to the true cost of credit can face significant penalties,” She says.
The penalty judgement follows findings made by the Court in September 2020 that Rent 2 Own Cars misled consumers by not disclosing the interest rate charged in some contracts, and in some cases by charging an interest rate higher than the rate stated in the contract. In so doing, Rent 2 Own Cars breached the National Consumer Credit Protection Act and the ASIC Act. Green and Roberts were found to be knowingly involved in these breaches .
Rent 2 Own Cars was placed into liquidation on 25 March 2021 and deregistered with effect from 30 September 2021.
When imposing the pecuniary penalties, Justice Greenwood says that the conduct in this matter was extensive and serious, and that Green and Roberts were knowingly concerned in breaching the law.
Justice Greenword also acknowledged the severity of Rent 2 Own Cars’ conduct, noting that while a pecuniary penalty could not be imposed on the company because it was deregistered, an appropriate penalty for its breaches would have been $775,000.
Roberts did not contest ASIC’s case or defend the proceeding at trial.
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