Rental store ‘rips off’ disability pensioner into paying $6,760 for a phone: ‘It's unconscionable’
- Replies 18
The joy of acquiring a new item can often overshadow the financial implications of the purchase.
This was the case for Janene Thacker, a disability pensioner who has been using appliance rental stores for decades. Since she had limited savings, she could not buy things outright.
While it helps her fulfil some needs, the cost of renting some of these items, often inflated to several times their retail value, has left her and many others questioning the ethics of such businesses.
Ms Thacker's story is a cautionary tale for all consumers, particularly those on a tight budget.
In February 2021, Ms Thacker rented a lounge for $4,056. In September, she rented a tablet for her mother for $1,586, and in November, she rented a fridge for $6,240. While these purchases made her feel like she was living a normal life, the financial burden they imposed was far from ordinary.
‘I felt I was up there for a little while, you know what I mean?’ She said.
The most shocking instance was when Rent4Keeps, a rental appliance business, signed Ms Thacker up for a Samsung S21 phone. The phone, which retails for about $1,800, cost her a staggering $6,760.
'They may be brand new products, but you're paying four times the money for them, so how do these companies get away with that?' Ms Thacker asked.
The businesses would deduct payments from Ms Thacker's Centrelink benefits fortnightly using Centrepay, a government-administered service.
This online tool is a bill-paying service connected to a user's Centrelink account. Approved providers arrange contracts with Centrepay's 600,000 monthly users and take repayments before the money is deposited into the user's bank account.
Centrepay was introduced by the Howard government in 1999 to enable Indigenous communities to pay for housing expenses. It was later expanded to other retailers. However, the service has been criticised for enabling predatory practices.
'People are going in with blind faith [thinking] that because it is endorsed by Centrepay, that it's an ethical business and they're going to be treated fairly,' Caitlin Bender, AnglicareNT Financial Counsellor, stated.
‘We're seeing more and more predatory practices emerge in what was originally designed to be a really safe model. It's unconscionable,’ she added.
For Ms Thacker, more than a third of her $971.50 fortnightly disability pension went to appliance rental companies. She soon found herself in financial strife and fell behind in her rent.
'I was already in the contracts, and there was no backing out,' she said. 'I really felt that I had no other choice—that I had to continue to make payments.'
She continued, ‘It was a toss-up… do I feed myself? Do I feed my animals? Do I pay rent? What do I do? I'm stuck.’
The Australian Securities and Investments Commission (ASIC) announced in April 2022 that it was taking legal action against Rent4Keeps Australia and its Victorian franchisee for alleged violations of the Credit Act.
ASIC accused Rent4Keeps of operating a business model 'designed to avoid consumer protections for financially vulnerable consumers'.
According to ASIC’s statement of claim, 92 per cent of the customers were Centrelink recipients, 79 per cent were unemployed, and all were financially vulnerable.
Despite ASIC's announcement, the New South Wales (NSW) Rent4Keeps franchisee signed Ms Thacker up again less than three weeks later. This time, it was for a washing machine that would cost her $2,340—more than three times the model's retail price.
‘They're literally ripping people off and taking advantage of low-income earners,’ Ms Thacker expressed.
The NSW franchise is run by the same person subject to ASIC's legal action—Melbourne-based businessman Kevin Payne.
Mr Payne operates Rent4Keeps Australia and replaced his wife Vikki as the sole director of both the Victorian and NSW franchises in July last year.
In September, financial support service Moneycare assisted Ms Thacker to have her remaining debts waived. The appliance rental companies retained over $14,600 that she had previously paid them.
'I thought they were helpful to me,' Ms Thacker shared. '[But] ever since I've [...] been made more aware…I'm angry.'
'These companies are literally getting away with doing this to innocent people…ruining people's financials, ruining people's lives,' she added.
Labor Senator for Western Australia Louise Pratt is calling on Services Australia, which administers Centrepay, to step up its oversight.
'It's high time they dove right in and cleaned up all of the businesses that sit inside Centrepay that are ripping off consumers,' she said.
Have you had any experiences with appliance rental stores? Do you think they are helpful? Share your stories in the comments below.
This was the case for Janene Thacker, a disability pensioner who has been using appliance rental stores for decades. Since she had limited savings, she could not buy things outright.
While it helps her fulfil some needs, the cost of renting some of these items, often inflated to several times their retail value, has left her and many others questioning the ethics of such businesses.
Ms Thacker's story is a cautionary tale for all consumers, particularly those on a tight budget.
In February 2021, Ms Thacker rented a lounge for $4,056. In September, she rented a tablet for her mother for $1,586, and in November, she rented a fridge for $6,240. While these purchases made her feel like she was living a normal life, the financial burden they imposed was far from ordinary.
‘I felt I was up there for a little while, you know what I mean?’ She said.
Janene Thacker, a disability pensioner, was charged $6,760 for a phone by a rental store. Credit: Fernando Arcos/Pexels
The most shocking instance was when Rent4Keeps, a rental appliance business, signed Ms Thacker up for a Samsung S21 phone. The phone, which retails for about $1,800, cost her a staggering $6,760.
'They may be brand new products, but you're paying four times the money for them, so how do these companies get away with that?' Ms Thacker asked.
The businesses would deduct payments from Ms Thacker's Centrelink benefits fortnightly using Centrepay, a government-administered service.
This online tool is a bill-paying service connected to a user's Centrelink account. Approved providers arrange contracts with Centrepay's 600,000 monthly users and take repayments before the money is deposited into the user's bank account.
Centrepay was introduced by the Howard government in 1999 to enable Indigenous communities to pay for housing expenses. It was later expanded to other retailers. However, the service has been criticised for enabling predatory practices.
'People are going in with blind faith [thinking] that because it is endorsed by Centrepay, that it's an ethical business and they're going to be treated fairly,' Caitlin Bender, AnglicareNT Financial Counsellor, stated.
‘We're seeing more and more predatory practices emerge in what was originally designed to be a really safe model. It's unconscionable,’ she added.
For Ms Thacker, more than a third of her $971.50 fortnightly disability pension went to appliance rental companies. She soon found herself in financial strife and fell behind in her rent.
'I was already in the contracts, and there was no backing out,' she said. 'I really felt that I had no other choice—that I had to continue to make payments.'
She continued, ‘It was a toss-up… do I feed myself? Do I feed my animals? Do I pay rent? What do I do? I'm stuck.’
The Australian Securities and Investments Commission (ASIC) announced in April 2022 that it was taking legal action against Rent4Keeps Australia and its Victorian franchisee for alleged violations of the Credit Act.
ASIC accused Rent4Keeps of operating a business model 'designed to avoid consumer protections for financially vulnerable consumers'.
According to ASIC’s statement of claim, 92 per cent of the customers were Centrelink recipients, 79 per cent were unemployed, and all were financially vulnerable.
Despite ASIC's announcement, the New South Wales (NSW) Rent4Keeps franchisee signed Ms Thacker up again less than three weeks later. This time, it was for a washing machine that would cost her $2,340—more than three times the model's retail price.
‘They're literally ripping people off and taking advantage of low-income earners,’ Ms Thacker expressed.
The NSW franchise is run by the same person subject to ASIC's legal action—Melbourne-based businessman Kevin Payne.
Mr Payne operates Rent4Keeps Australia and replaced his wife Vikki as the sole director of both the Victorian and NSW franchises in July last year.
In September, financial support service Moneycare assisted Ms Thacker to have her remaining debts waived. The appliance rental companies retained over $14,600 that she had previously paid them.
'I thought they were helpful to me,' Ms Thacker shared. '[But] ever since I've [...] been made more aware…I'm angry.'
'These companies are literally getting away with doing this to innocent people…ruining people's financials, ruining people's lives,' she added.
Labor Senator for Western Australia Louise Pratt is calling on Services Australia, which administers Centrepay, to step up its oversight.
'It's high time they dove right in and cleaned up all of the businesses that sit inside Centrepay that are ripping off consumers,' she said.
Have you had any experiences with appliance rental stores? Do you think they are helpful? Share your stories in the comments below.
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BE WARNED.
