Radio Rentals-parent Thorn Group has settled a consumer-led class-action lawsuit lodged against it in 2017, which involved customers paying far in excess of the market value for goods rented.
According to law firm Maurice Blackburn, which represented thousands of people against the business, Radio Rentals’ Rent, Buy, $1 Buy program had seen customers pay up to seven times the retail price.
The class action settled on Monday for a sum of $25 million, though Thorn Group’s insurer will also make a separate contribution toward the settlement. According to Thorn Group, the settlement is not an admission of liability.
While the two parties have agreed on the sum, the settlement must still be approved by the Federal Court.
Maurice Blackburn principal Ben Slade said the program may have affected up to 200,000 people.
“The class action alleges that one of the more insidious aspects of the business is that Radio Rentals continued to draw money on an ongoing basis from its clients’ Centrepay (Centrelink payment) accounts, well beyond the retail value of the goods,” Maurice Blackburn Lawyers principal Ben Slade said upon launching the case.
“Rent, Try, $1 Buy is misleading when you delve into what’s involved. What we have found is that people are paying up to seven times the true retail cost for goods in the belief that the goods will always be theirs, yet the contracts do not give them that right.”
Lead plaintiff Casey Simpson said Radio Rentals had taken advantage of her after she paid more than $3300 for a used mattress and bed worth $430.
“I have four kids and am on a low income – I thought Rent, Try, $1 Buy would be a sensible alternative to get some basic goods in a way we could afford,” Simpson said.
“I never knew I’d had to pay as much as much as they kept charging me, or that I wouldn’t have a right to buy the goods for $1.”
Radio Rentals in South Australia is an independent entity, and is not involved in the lawsuit.