Flexirent
Encyclopedia
Flexirent Capital Pty Ltd. or more commonly Flexirent, is an Australian consumer leasing service of business and consumer electronics and is the primary product of FlexiGroup. The Flexirent service is offered by numerous computer and IT equipment retailers, however has been strongly associated with Australian retailer Harvey Norman
since Flexirent's successful 12 month trial in its Brisbane stores in 1995. Critics of Flexirent have accused Flexirent and similar leasing systems of containing strong elements of predatory lending
.
stores in Brisbane for a 12 month period and subsequently rolled out to all stores shortly thereafter.
The company was floated on the Australian Stock Exchange
on December 11, 2006 after consistent growth during its 11 years of operation. 2006 also saw the Flexirent product significantly altered to incorporate an insurance
element.
Rental terms can be arranged through Flexirent approved partners or direct with Flexirent through a pre-approval process. At the end of the contract the customer is granted a number of options. Returning the equipment in good working order allows the customer to exit the contract or begin a new one (the latter is possible within the last three months of the contract providing it is equal or greater value). Alternatively at the end of contract the customer can negotiate to purchase the equipment outright.
Marketing for Flexirent often touts the benefits of 'renting' technology given its extremely progressive nature
. Other claimed benefits include the lack of requirement for a deposit, tax deductibility for business use, loan equipment, and insurance benefits.
practises, misleading pitching regarding the difference between 'renting' and 'buying' and salespeople highly motivated by large sales incentives to sell Flexirent services to customers.
has had very close ties to Harvey Norman since 1995 and is heavily marketed in stores. Flexirent
is alleged to have strong elements of predatory lending
practises.
Gerry Harvey
, Chairman and Co-founder of Harvey Norman
has himself has asserted on primetime Australian television
in a January 2008 airing of Today Tonight
that Flexirent should be turned down by the average family. This is despite his stores indiscriminately pushing the product onto its entire customer base.
in a 2007 report postulated that financiers of consumer lease agreements, including Flexirent sought to circumvent Australian consumer protection laws that apply to loan agreements, citing complex and misleading clauses relating to final ownership. It also raised issues with the high cost of the agreeements and their marketing to low-income consumers.
Harvey Norman
Harvey Norman is a large Australian-based retailer of electrical, computer, furniture, entertainment and bedding goods. It is effectively a franchise and the main brand owned by Harvey Norman Holdings Limited...
since Flexirent's successful 12 month trial in its Brisbane stores in 1995. Critics of Flexirent have accused Flexirent and similar leasing systems of containing strong elements of predatory lending
Predatory lending
Predatory lending describes unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly...
.
History
Flexirent was launched in 1993 as a finance service for digital handset equipment. In 1995 the service was trialed at three Harvey NormanHarvey Norman
Harvey Norman is a large Australian-based retailer of electrical, computer, furniture, entertainment and bedding goods. It is effectively a franchise and the main brand owned by Harvey Norman Holdings Limited...
stores in Brisbane for a 12 month period and subsequently rolled out to all stores shortly thereafter.
The company was floated on the Australian Stock Exchange
Australian Stock Exchange
The Australian Securities Exchange was created by the merger of the Australian Stock Exchange and the Sydney Futures Exchange in July 2006. It is the primary stock exchange group in Australia....
on December 11, 2006 after consistent growth during its 11 years of operation. 2006 also saw the Flexirent product significantly altered to incorporate an insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
element.
Product Overview
Flexirent is typically a rental contract extending 12, 24 or 36 months consisting of monthly payments for products $500 or more in value.Rental terms can be arranged through Flexirent approved partners or direct with Flexirent through a pre-approval process. At the end of the contract the customer is granted a number of options. Returning the equipment in good working order allows the customer to exit the contract or begin a new one (the latter is possible within the last three months of the contract providing it is equal or greater value). Alternatively at the end of contract the customer can negotiate to purchase the equipment outright.
Marketing for Flexirent often touts the benefits of 'renting' technology given its extremely progressive nature
Moore's Law
Moore's law describes a long-term trend in the history of computing hardware: the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years....
. Other claimed benefits include the lack of requirement for a deposit, tax deductibility for business use, loan equipment, and insurance benefits.
Media
Flexirent and its business model has been subject to much criticism. Frequently cited sources of criticism include perceived similarities to predatory lendingPredatory lending
Predatory lending describes unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly...
practises, misleading pitching regarding the difference between 'renting' and 'buying' and salespeople highly motivated by large sales incentives to sell Flexirent services to customers.
Gerry Harvey and Harvey Norman
FlexirentFlexirent
Flexirent Capital Pty Ltd. or more commonly Flexirent, is an Australian consumer leasing service of business and consumer electronics and is the primary product of FlexiGroup...
has had very close ties to Harvey Norman since 1995 and is heavily marketed in stores. Flexirent
Flexirent
Flexirent Capital Pty Ltd. or more commonly Flexirent, is an Australian consumer leasing service of business and consumer electronics and is the primary product of FlexiGroup...
is alleged to have strong elements of predatory lending
Predatory lending
Predatory lending describes unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly...
practises.
Gerry Harvey
Gerry Harvey
Gerry Harvey is an Australian entrepreneur best-known for being the executive chairman of Harvey Norman Holdings Ltd., a large company which runs Australian retail chain Harvey Norman...
, Chairman and Co-founder of Harvey Norman
Harvey Norman
Harvey Norman is a large Australian-based retailer of electrical, computer, furniture, entertainment and bedding goods. It is effectively a franchise and the main brand owned by Harvey Norman Holdings Limited...
has himself has asserted on primetime Australian television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
in a January 2008 airing of Today Tonight
Today Tonight
Today Tonight is a controversial Australian News and Current Affairs program, produced by the Seven Network and shown weeknightly at in direct competition with rival Nine Network program A Current Affair....
that Flexirent should be turned down by the average family. This is despite his stores indiscriminately pushing the product onto its entire customer base.
End of Term Conditions
As per Flexirent end of term conditions to own the equipment outright a customer needs to negotiate a price (outlined in the contract) at the end of the contract with Flexirent whom have the right to accept or decline any offer.Allegation of Attempts to Avoid Consumer Protection Laws
The Micah Law Centre, a not-for-profit law firmLaw firm
A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients about their legal rights and responsibilities, and to represent clients in civil or criminal cases, business transactions, and other...
in a 2007 report postulated that financiers of consumer lease agreements, including Flexirent sought to circumvent Australian consumer protection laws that apply to loan agreements, citing complex and misleading clauses relating to final ownership. It also raised issues with the high cost of the agreeements and their marketing to low-income consumers.