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Justice for Centrelink recipients charged $780 for a $200 speaker

Aussies who still owed money to the company for their goods will no longer have to make payments.

A composite image of a Centrelink logo on a sign and a bluetooth speaker.
Centrelink recipients were charged excessive prices by Layaway for household goods. (Source: AAP / Getty)

Aussie company Layaway Depot has been ordered to pay a $375,000 fine after the Federal Court determined it has been charging Aussies on Centrelink obscene prices for household goods.

Layaway charged “excessive” interest rates on loans it provided for the most vulnerable Aussies for goods like mobile phones, televisions and speakers.

For example, a customer paid instalments totalling $780 for a bluetooth speaker that retailed for just $200.

In another instance, a person was charged a whopping $1,200 for a mobile phone that retailed for just $249.

“For a consumer to pay almost five times the market price for a mobile phone is excessive. For most of the consumers, their sole income was Centrelink benefits,” ASIC deputy chair Sarah Court said.

“ASIC will continue to take action where we see consumer harm in the provision of credit, especially where financially vulnerable consumers are involved.”

Anyone who has made at least one repayment to the company for their goods will no longer be required to make any more payments, and can keep their items.

“ASIC took on this case because we believed Layaway contracts were deliberately structured to get around consumer protections that exist under the Credit Act,” Court said.

“These protections, such as the maximum rate of annual cost that can be charged, are in place to ensure credit is provided to consumers fairly, and people are not being taken advantage of.”

The Federal Court found Layaway engaged in unlicensed credit activity and charged consumers in excess of the annual cost rate of more than 48 per cent in respect to 70 payment arrangements.

The Federal Court also ordered an injunction permanently restraining Layaway from engaging in credit activity and entering into credit contracts with an annual cost rate exceeding 48 per cent.

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