Urban Rampage: ASIC issues permanent ban on business selling goods on credit using Centrepay

ASIC has permanently banned a clothing retailer from using Centrepay to sell goods to vulnerable, predominantly First Nations, Centrelink recipients. The company has indicated it will appeal.

Urban Rampage Tennant Creek. Picture: Facebook

Australia’s corporate regulator has permanently banned a clothing retailer with four regional NT outlets from using Centrepay to sell goods on credit to vulnerable Centrelink recipients, saying the company’s practices were “unacceptable”.

The decision by ASIC to issue a final stop order to Coral Coast Distributors (Cairns) Pty Ltd, which trades as Urban Rampage, has been met with fury by the company, which says it will be appealing to the Administrative Appeals Tribunal (AAT).

It also believes it has an arguable case that ASIC has breached the Racial Discrimination Act 1975, in that the ban on Urban Rampage providing goods on Centrepay, which deducts payments prior to receiving a welfare benefit, disproportionately affects Aboriginal people, the business’ major customer base.

ASIC announced on Wednesday it was converting the company’s Centrepay suspension, imposed in late February, into a permanent ban, the first such time the regulator has used its powers in this way.

“The decision comes after ASIC found that those arrangements were unsuitable for consumers in [Urban Rampage’s] target market because they were unlikely to be consistent with their financial situation and placed them at risk of financial hardship,” the regulator said in a statement.

Australian Securities and Investments Commission commissioner Alan Kirkland. Supplied

ASIC Commissioner Alan Kirkland said Urban Rampage, which has outlets at Alice Springs, Katherine, Nhulunbuy and Tennant Creek, “targeted First Nations consumers who received Centrelink payments”.

“After entering into Centrepay credit arrangements at Urban Rampage stores, many of these consumers found themselves without money to pay for essentials,” he said.

“It is unacceptable for businesses to use credit-like facilities in a way that places vulnerable customers into hardship.”

A spokesman for Urban Rampage said the company has instructed its lawyers to appeal to the AAT and explore a legal challenge under the Racial Discrimination Act 1975.

“ASIC’s move is a throwback to the Stolen Generation,” the spokesman said.

Urban Rampage Katherine. Picture: Google Street View

“We have more than 1000 First Nations customers who have signed a petition slamming ASIC’s ban but it refuses to listen to them and thinks they are incapable of articulating themselves.

“We will absolutely appeal and fight for the rights of our First Nations customers to be treated equally and fairly.”

Urban Rampage took particular umbrage after ASIC failed to produce evidence that any specific harm had been caused.

A customer of Urban Rampage Tennant Creek signing a petition to bring back Centrepay at the store. Picture: Facebook

“I accept that there is no evidence of actual harm to customers... [in the months leading up to] the making of an interim stop order on 28 February 2024,” delegate Phillip Mines said in his decision.

The Urban Rampage spokesman said this did not make any sense.

“There are no complaints and no findings of unconscionable conduct,” he said.

“Yet ASIC has banned Centrepay because it thinks our customers... are incapable of making sound financial decisions.”

Financial advocates say Centrepay has become a vehicle for financial abuse, as there is no limit to what proportion of a Centrelink payment can be hived off to fulfil Centrepay obligations, meaning those who have overcomitted are left with nothing to buy essentials such as food.

There are now more than 15,000 Centrepay-registered businesses Australia-wide.

Specifically regarding Urban Rampage, advocates claim the company was in the business of selling high-cost, low-value goods to Aboriginal people that could be obtained elsewhere at a fraction of the price.