22-05-2025
Snaffle sued by ASIC for allegedly inflating prices, overcharging customers hundreds of dollars on tech, home goods
An Aussie online store is being sued for allegedly inflating prices and overcharging customers that were making repayments on household items and tech goods.
Join to watch the full interview with ASIC on its decision to sue Snaffle from 4.30pm.
Online retailer Snaffle, that offers consumers credit payments, is being taken to court by the Australian Securities and Investments Commission for allegedly boosting the price of goods by circumventing the cap on interest repayments.
Australia has a 48 per cent annual repayment cap on credit contracts used to purchase goods and pay them off over time.
The corporate watchdog alleges Snaffle added arbitrary charges on top of its interest rate including mark ups, a profit margin and a delivery fee which the company never actually incurred.
ASIC claims this allowed Snaffle to charge interest rates of between 60 and 103 per cent.
It alleges Snaffle was able to breach the cap by purchasing goods through its parent company Walker Stores before reselling them to other entities it was linked with to increase the price.
Snaffle would then sell the good to customers with interest added on top of the already inflated price, according to ASIC.
The watchdog also claims Snaffle incorrectly applied a flat interest rate for the whole time customers made repayments on more than 40,000 credit contracts instead of calculating the interest on the unpaid balance.
Under Australia's National Credit Code, a company is required to reduce the interest over time as loan is repaid.
Snaffle is also being sued for allegedly failing to properly disclose the real cash price of the goods advertised on its website or the amount of credit it was providing shoppers.
The company's website shows consumers a low weekly price they can pay, alongside the upfront price, but does not tell shoppers the total cost of the repayments.
ASIC Deputy Chair Sarah Court said the watchdog took this alleged conduct very seriously and warranted legal action.
'We're taking this to court because we do think this is egregious conduct,' Ms Court told reporters on Thursday.
'We know that consumers are facing enormous living costs. That is well understood.'
Ms Court also said the customers who were allegedly overcharged by Snaffle were those struggling with price pressures, making the smaller charges over a long period of time more attractive.
'If they could afford to pay for these goods up front they'd be paying a whole lot less than they're paying under these contracts,' Ms Court said.
'Our concern is that in all of those circumstances artificially inflating the base price and then adding significant interest charges on top is simply charging consumers in this hostile living environment things that they should not have to pay, things that we allege are breaking the law.'
ASIC outlined three cases of the alleged overcharging by Snaffle.
Some shoppers who chose to enter credit contracts to purchase a 7.5kg front loading washing machine, which retailed for $477, ended up paying $1,549 over three years.
This was $648 more than they should have for this product, ASIC alleges.
Similarly, consumers who purchased a 315L fridge, with a retail value of $797, paid up to $835 more than they should have and shoppers who paid off a $1,487 iPhone over three years paid up to $1,433 more, ASIC argues.
