Radio Rentals slapped with class action lawsuit

Potentially affects 200,000 consumers across Australia

A class action lawsuit that could be worth $50 million has been brought against Radio Rentals, and alleges the consumer lease company took advantage of the financially vulnerable.

The suit comes less than a week after CHOICE participated in a public demonstration in Canberra asking the government to legislate protections against consumer leases and payday loans.

The nationwide class action was filed in Sydney's Federal Court against Thorn Australia Pty Ltd, the company trading as Radio Rentals, and potentially affects 200,000 consumers.

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The court case alleges Radio Rentals' 'Rent, Try, $1 Buy' offer is misleading, using the case of lead plaintiff Casey Simpson as an example.

"Here we have a national company that deals with vulnerable people promising them one thing but signing them up to another, at a much higher price than is reasonable," says Ben Slade, principal at Maurice Blackburn Lawyers, the firm bringing the action.

"What we have found is that people are paying up to seven times the true retail costs for goods in the belief that the goods will always be theirs, yet the contracts do not give them that right."

Casey Simpson, a mother of five from Wagga Wagga, claims Radio Rentals deducted more than $3300 from her Centrelink account for a used mattress and bed valued at significantly less – approximately $430.

"I thought [Radio Rentals'] Rent, Try, $1 Buy would be a sensible alternative to get some basic goods in a way we could afford.

"I never knew I'd have to pay as much as they kept charging me, or that I wouldn't have a right to buy the goods for $1. I feel unfairly treated and taken advantage of."

Earlier this week CHOICE participated in a demonstration with six other consumer advocacy groups asking the federal government to legislate protections against all small amount credit contracts, which include consumer leases and payday loans.

The proposed reforms – which were supported by the federal government more than 120 days ago – include limiting lease repayments, prohibiting monthly fees for early repayments and banning unsolicited payday loan offers to current or previous customers.

Radio Rentals did not reply to a request for comment at the time of publication.