19 Apr 2017

Unconscionable Conduct: Magnificent examples!

Imagine you have a science research lab doing essential work leased from Monash Uni until 2030, but they decide to chuck you out to gain a ‘free building’? Or you are a poor person renting a washing machine on a ‘Rent, Try, and $1 Buy’ deal from Radio Rentals but discover the deal is not as you imagined?

These are my entries this month as magnificent examples of ‘Unconscionable Conduct.’ Unconscionable Conduct is generally understood to mean conduct which is so harsh that it goes against good conscience. Under the Australian Consumer Law, businesses must not engage in Unconscionable Conduct, when dealing with other businesses or their customers. That’s what the Australian Competition and Consumer Commission defines it as.

Which gives legs to a class action against Radio Rentals, part of Thorn Group Limited, a listed Australian company led by chair Joycelyn Morton (paid $187,000 last year), and CEO James Marshall (paid $655,000 last year). From their boardroom they are well insulated from the depressing daily grind at one of their stores. Here’s an example of their gouging of the poor and dispossessed, usually people with bad or no credit rating.


That’s who they pitch their advertising at. Exhibit A: One Simpson 7kg front load washing machine, new. Price at Good Guys: $548. Likely wholesale price to Radio Rentals: 60% of the retail, which makes $328.80. You can rent this today with no deposit, free delivery and setup, and all you pay is the first month’s rental. At $9.63 per week for a new machine over 48 months, you’ll pay $2,003.04 – before you are entitled to buy the thing for $1. There is a slightly cheaper option, for a ‘near new’ machine, and there are 24 and 36 month terms – at higher rentals – as well.

The class action alleges Radio Rentals (in at least one case) kept hoovering the rental charges from their Centrelink payment after the term ended. The very nature of a class action relies on a large pool of complainants. The case was brought by Maurice Blackburn who said that customers do not automatically get to buy their rented items outright for $1.

“The contract fine print stated that instead the impetus is on customers to negotiate to buy rented appliances or furniture for a price agreed by Radio Rentals. If customers fail to secure a purchase, their contracts automatically roll over into another 24, 36 or 48 month term”, they said in The Australian.

Sure people need to take responsibility for their own actions, but if you knew a single mum on Centrelink welfare support payments with a broken washing machine, then you’d know raw desperation. As an aside, I spoke to a Radio Rentals driver, they are a very unhappy mob as they are routinely required to go and repossess stuff from people who really are at the end of the line. If the class action, showcased at $50 million, succeeds, then the ‘legality’ of what Thorn Group do on a daily basis will be determined. I hope those directors sleep well at night.

By the way, the Thorn Group annual report is littered with glib little info graphics about how 97.3% of all Radio Rental customers think the firm treats them with respect and suchlike. I’d love to see the veracity of those surveys, perhaps Maurice Blackburn could add them onto the subpoena pile?

Across town we move to the magnificent case of legal bastardry which to our eyes looks like classic Unconscionable Conduct. Sadly the courts do not agree, so one of the country’s leading cancer and vaccine research firms are getting booted off the Monash Uni campus because of a legal technicality.

Despite having a lease until 2030, they were required to exercise an option each 7 years which someone forgot to do. The Uni pounced, and not only will they be forced to go but they have to pay $1.8 million (plus legal costs) to remediate the premises – a cost not required should they continue to use the place.

They lost a case against the Uni (note that Unconscionable Conduct was not tested, the case was more based on the lease terms), in which an email between the Uni Property Manager and a Business Support Co-ordinator was unearthed where it was suggested that the Uni could use ‘a free building’.

They sure did get that.



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