Australian Securities & Investments Commission sues Snaffle over alleged inflated pricing and breaches of the 48% Annual Cost Rate cap

The Australian Securities & Investments Commission (ASIC) has commenced court action against Walker Stores Pty Ltd, operator of online consumer goods supplier Snaffle, alleging it inflated the cost of household goods and electronics and applied unlawful interest charges under its credit contracts. ASIC claims the pricing structure was used to circumvent the National Credit Code (NCC) Annual Cost Rate cap of 48%, leading customers to pay significantly more than permitted. ASIC’s court filings cite three credit contracts where the Annual Cost Rate was allegedly between 60% and 103% and where required disclosures, including the cash price and true cost of credit, were not provided. ASIC also alleges up to 40,430 contracts may have incorrectly applied flat interest to the full purchase price for the entire term rather than calculating interest on the reducing unpaid balance, as required under the NCC. In the examples highlighted, a washing machine retailing for AUD 477 was financed for AUD 1,549 over three years, a fridge retailing for AUD 797 for AUD 2,340, and a phone retailing for AUD 1,487 for AUD 4,246, with ASIC alleging consumers paid up to AUD 648, AUD 835 and AUD 1,433 more than they should have, respectively; ASIC is seeking declarations of contraventions, pecuniary penalties, injunctions and adverse publicity orders.