Add Category
The national corporate regulator has issued a permanent ban on the use of Centrepay by outback retailer Urban Rampage, after finding the credit tool was causing financial harm to First Nations customers.
The Australian Security and Investments Commission (ASIC) made the order on Wednesday, marking the first final stop order issued under design and distribution obligations introduced in 2021.
Urban Rampage has indicated it will appeal the decision and may launch a legal challenge under the Racial Discrimination Act.
The retailer operates 10 stores across regional and remote towns in the Northern Territory, Queensland and Western Australia, and sells clothing, jewellery and other homewares.
Its customers are predominantly First Nations people who use Centrepay, a credit service that lets consumers buy goods and pay them off via deductions from their Centrelink payments.
ASIC said the retailer had targeted First Nations consumers on low incomes who were receiving Centrelink payments.
"After entering into Centrepay credit arrangements at Urban Rampage stores, many of these consumers found themselves without money to pay for essentials," Commissioner Alan Kirkland said.
"It is unacceptable for businesses to use credit-like facilities in a way that places vulnerable customers into hardship."
Retailer defends business practices
Urban Rampage accused ASIC of "running an inherently racist test case of its powers and using First Nations people as guinea pigs".
"We have said from day one ASIC has been acting in a racist and paternalistic way towards First Nations people, who are largely our customer base," a spokesperson said.
"In the remote communities we service, this looks like click-and-pay for whites only. No credit for black fellas.
"The question has to be asked if ASIC will now ban other Centrepay retailers where the customers are predominantly white Australians."
The retailer argued the ban infringed on the autonomy of First Nations consumers and left them without alternatives to buy clothes and other items.
'Most vulnerable' taken advantage of
Veronica Johnson, a financial counsellor with Broome Circle, welcomed the decision to put an end to Urban Rampage's use of Centrepay.
"I have had several clients over so many years from the Northern Territory, as well as WA, and Urban Rampage has put people in financial stress for many, many years," she said.
Ms Johnson said she had witnessed the retailer take advantage of customers living in remote areas with limited retail options.
"They don't have anywhere else to shop and so they're bound by whatever is readily available in the very remote places … and that's the advantage of Urban Rampage and they've taken advantage of the most vulnerable," she said.
Mr Kirkland warned the corporate regulator would act to stop other businesses causing financial harm to First Nations communities.
"Other businesses that use this model should reflect on this decision and consider whether their own practices comply with the law," he said.