RENTAL PRODUCTS
RENT TO BUY
RENTER BEWARE!
Fridges, washing machines, TVs, computers, furniture and other essential household items are expensive to buy. ‘Renting to buy’ these items might seem like a good idea if you can’t afford them upfront.
‘Rent to buy’ or ‘lease’ contracts for household items are often more expensive than if you pay for the item up front and usually you don’t even have the right to own the item at the end.
If the item is damaged, lost or stolen, you will still have to pay the amount owing under the rental contract. Some companies say they will cover you for damage or loss if you pay a fee but this can be expensive and they don’t cover all damage and loss.
If you can’t afford to buy a household item that you need, you may be eligible for a no or low interest loan to pay for the item. This is a much more affordable option than renting the item.
‘Rent to buy’ or ‘lease’ contracts for household items are often more expensive than if you pay for the item up front and usually you don’t even have the right to own the item at the end.
If the item is damaged, lost or stolen, you will still have to pay the amount owing under the rental contract. Some companies say they will cover you for damage or loss if you pay a fee but this can be expensive and they don’t cover all damage and loss.
If you can’t afford to buy a household item that you need, you may be eligible for a no or low interest loan to pay for the item. This is a much more affordable option than renting the item.
You may be asked to return the rented item at the end of the contract even though you paid more than what the item is worth!
ANNE'S STORY
Anne is a single mum caring for two kids and is a survivor of family violence. Anne is
unemployed and her only income is the carers payment and family tax benefit.
Anne had 4 rent to buy contracts with Radio Rentals between 2012 and 2017. The rent to buy contracts were for household items and her payments were made through Centrepay. Anne found that she couldn’t afford the rent to buy contracts and repaying them meant she couldn’t afford everyday things.
The amount Anne was paying for the household items was much more than what she would have paid if she had been able to buy them in a store. According to Radio Rentals, the household items had a recommended retail price of over $9,000 but Anne’s rent to buy contracts were over
$17,000. That’s almost $8,000 more than what Radio Rentals said the goods were worth.
Consumer Action helped Anne make legal arguments against Radio Rentals including that the rent to buy contracts were not fair and that Radio Rentals had legally done the wrong thing by Anne. Anne was able to resolve the dispute with Radio Rentals.
I'VE SIGNED A CONTRACT
You have legal rights when you enter into a rental contract for household items
Rental companies are meant to work out whether the contract will be affordable for you. If they didn’t do this and you can’t afford the payments, you may be able to get out of the contract.
It is also against the law for the company to give you false or misleading information about the contract or the goods.
For example, telling you that you will own the goods at the end of the contract if you have no right to own the goods. Or telling you the item is new when it is second hand.
Depending on what happened, you don’t always get to keep the goods even where the company has breached the law. Working this out can be tricky.
It is also important to get legal advice before you stop making payments because the goods can be taken by the company and they may still chase you for money under the contract even after you have returned the items.
