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Published 13 February 2013 10:40, Updated 14 February 2013 08:21
Mr Rental co-founders Glen and Kerrianne Hickman Photo: Glenn Hunt
Household goods and rental business Mr Rental will refund more than 1500 customers some of their fees, expected to total more than $300,000, after the Australian Securities and Investments Commission found its practice of charging early termination fees on rental contracts was unfair.
Mr Rental, a company that has been on several BRW Fast Franchises lists, has agreed to an enforceable undertaking with the regulator after ASIC deemed its practice of charging a “calculation period adjustment”, or an additional fee to customers who terminated their rental agreements early, unfair under consumer law and the ASIC Act (2001). ASIC says that to charge such fees in consumer leases, Mr Rental needs to have Australian credit licenses, which it is understood to be in the process of applying for.
As part of the enforceable undertaking, Mr Rental will amend its standard form rental contract, used by its 60-plus franchisees, and write to the customers who have paid the fee and provide them with a refund. It will also advise current customers that it will not charge the fee if they choose to terminate their contracts early and no longer impose the condition on new rental contracts.
Mr Rental had 68 franchises in Australia and 20 overseas last financial year. It reported revenue of $67 million in 2011-12. The company has been a strong retail performer, despite tough economic conditions, with average revenue growth of 19 per cent over the past three financial years.
Mr Rental has been contacted for comment.