‘Book up’ scheme not ‘unconscionable’, High Court rules
A ‘book-up’ scheme in SA’s remote Aboriginal lands was not “unconscionable”, High Court rules.
A battle over whether an outback store’s arrangement to hold customers’ debit cards and PIN numbers was “unconscionable” has come to an end, with the High Court rejecting ASIC’s arguments eight years after the family involved detailed their “book up” system in an interview.
The High Court today ruled store owner Lindsay Kobelt did not engage in unconscionable conduct, after his son, Tim Kobelt, detailed the “book up” system used at the store in Mintabie, in South Australia’s remote Anangu Pitjantjatjara Yankunytjatjara lands, to The Australian in September 2011.
Just weeks after he told of having dozens of cards and PINs stored at the business and how they were used, ASIC carried out compulsory interviews with the Kobelts, before filing proceedings against the father in May 2014.
That resulted in fines reaching almost $170,000 being ordered in the Federal Court, which were reduced to less than $40,000 on appeal after an unconscionable conduct finding was overturned, while a breach of the Credit Act was upheld.
ASIC appealed the matter to the High Court, after arguing Lindsay Kobelt, had withdrawn almost $1 million from the bank accounts of 85 customers who were buying second-hand cars from them.
ASIC’s lawyers had told the High Court that the overturning of the unconscionable conduct finding had “set a lower standard of consumer protection in the case of remote indigenous consumers than for others in Australian society”.
But the majority of the High Court disagreed.
They found that while the book-up system rendered customers more vulnerable to exploitation, Mr Kobelt did not take advantage of that vulnerability and customers understood and accepted the terms of the system.
