Insights / September 24th, 2018

ASIC seeks financial penalties against Rent 2 Own Cars Australia and its directors

Rent 2 Own Cars Australia Pty Ltd (“R2O”) authorises its franchisees to enter into credit contracts on R2O’s behalf with purchasers of used cars. Consumers make weekly payments to R2O under the hire-to-purchase style agreements.


ASIC has commenced proceedings in the Federal Court against R2O and its two directors, Timothy Roberts and Paul Green (“directors”), for breaches of the National Credit Code (“Code”). ASIC alleges that R2O’s franchisees used repayment “calculators” that miscalculated the weekly repayment amounts, overcharging consumers. Specifically, ASIC are alleging that:

  1. R2O charged consumers fees and interest exceeding the annual rate of 48% of the total moneys loaned (breach of section 32A of the Code)

  2. R2O failed to disclose the annual percentage rate it charged consumers (breach of section 17(4) of the Code)

  3. R2O failed to disclose the method of calculation of the interest charges (breach of section 17(5) of the Code)


ASIC is seeking financial penalties against R2O, declarations of contravention against R2O from engaging in credit activity, and declarations of contravention against the directors from engaging in credit activity.

The parties appeared in the Court on 12 September. By consent, Greenwood J ordered that R2O file a response to ASIC within 28 days.

If you have any questions about your legal obligations, please contact Hillary Ray or a member of our Financial Services team.

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