Radio Rentals' parent company Thorn Group has agreed to pay $6.1 million in remediation for customers and expects to be hit with a $2 million in civil penalty.
Thorn says it has reached a settlement with the corporate watchdog, the Australian Securities and Investments Commission over lending breaches.
ASIC has been investigating Thorn for nearly a year for lending to customers who did not meet minimum income thresholds for their contracts.
As part of the settlement, Thorn will admit to contravening certain responsible lending obligations and pay a civil penalty of $2 million, subject to the final decision of the Federal Court of Australia, likely in the first half of 2018.
Thorn Group's acting chief executive Peter Forsberg said he was pleased the company had reached a resolution with ASIC, adding that the company had changed its consumer leasing division to meet responsible lending obligations.
The company said it had made provision for both the civil penalty and the remediation in its prior year accounts.
It had also changed the way it conducts its consumer leasing operations, including implementation of a new online credit application and assessment system to ensure its lending was responsible.
Shares in Thorn were up 2.5 cents, or 3.16 per cent, at 81.5 cents by 1100 AEDT.
