Pramita Australia Pty Ltd and its sole officer, Indra Soebadio, have agreed to an enforceable undertaking relating to consumer credit contracts it entered into with customers between 1 July 2009 and 1 July 2010.
Pramita Australia operated a ‘rent-to-buy’ scheme for consumers to obtain consumer goods and pay for them over time. The company operated as a ‘joint business venture’ with CTR Rentals Pty Ltd, with both companies receiving a share of rental instalments paid by certain customers.
The Director of Consumer Affairs investigated Pramita Australia and found it had breached several provisions of the Fair Trading Act 1999 and the Uniform Consumer Credit Code. These breaches included:
- misrepresenting the consequences of not paying a debt and/or a misrepresentation about the method of recovering a debt
- threatening to do an act that may intimidate, harass, or expose a debtor to ridicule
- misleading and deceptive conduct – the transactions made with consumers were consumer credit contracts, not rent to buy contracts as advertised
- unconscionable conduct – the company knew that many of its customers had limited finances, were unlikely to have many assets, and had possibly been rejected by mainstream lenders.
The company and Mr Soebadio acknowledged that they had contravened the Fair Trading Act. They also confirmed that all consumer contracts before 1 July 2010 have been cancelled.
The company and Mr Soebadio agreed to several undertakings relating to consumer contracts entered into before 1 July 2010. These include that they will not:
- collect any payment for, administer or manage any such contract
- commence or recommence any enforcement action against any consumer who entered into such a contract
- try to recover possession of any goods relating to these contracts.
The company and Mr Soebadio also agreed to:
- ensure that all contracts made with consumers on or after 1 July 2010 comply with the National Credit Code (NCC)
- not manage, operate or promote any similar scheme that contravenes that code.
The Director of Consumer Affairs Victoria accepted the undertakings from the company and Mr Soebadio on 22 December 2011.
CTR Rentals Pty Ltd and its executive director, Richard van der Velde, also agreed to similar undertakings.
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