Radio Rentals owner, Thorn Group, has ceased its ‘Rent Try $1 Buy’ lease class action with a $25 million settlement – an admission of liability is subject to court approval.
The settlement is pending Federal Court approval, with Radio Rentals’ insurer AIG making a separate $4 million contribution.
The class action was launched in 2017, and follows claims of misleading and deceptive contract conduct for over 200,000 customers.
The final penalty is less than the initial $50 million sought.
Customers claim they were not eligible to purchase rented goods for $1 – incurring excessive lease charges – contrasting Radio Rentals’ advertising.
According to Maurice Blackburn, some ‘Rent Try $1 Buy’ customers were forced to pay up to seven times the RRP for products.
The news comes after Thorn shelled out over $8 million to ASIC in January last year, for remediation and penalties relating to customer leases inked between January 2012 – May 2015.
Radio Rentals stores in South Australia are not owned and operated by the Thorn Group. South Australian run Thorn Group stores are named ‘Rentlo Reinvented.’
For the financial year ending March 31, Radio Rentals fared an operating loss of $2.2 million.
The Group claims it’s confident it will be able to pay the settlement, despite recent debts and write-offs.
