Urban Rampage has decided to withdraw its appeal against a permanent ban on enrolling customers in Centrepay credit arrangements. The retailer, which sells clothing, jewelry, and home goods, operates ten stores in regional and remote areas of Western Australia, the Northern Territory, and Queensland.

In February 2024, the Australian Securities and Investments Commission (ASIC) determined that Coral Coast Distributors (CCD), the parent company of Urban Rampage, was using Centrepay in a manner that harmed consumers. According to the Urban Rampage website, many of its customers are low-income individuals or welfare recipients, primarily residing in remote Aboriginal communities.

Initially, CCD had planned to contest the Centrepay ban in the Administrative Review Tribunal, but it has since withdrawn its application. A spokesperson for the tribunal confirmed that the case has been finalized and there will be no further hearings.

Centrepay, managed by Services Australia, allows individuals to purchase specific goods and services through deductions from their Centrelink payments. ASIC Commissioner Alan Kirkland expressed concern about the number of customers, especially First Nations consumers, who may have been signed up for debts they could not afford or fully comprehend. "Deductions were coming out of their Centrelink payments before they even received them," he stated. He added that many of these individuals were already on low incomes, making it difficult for them to cover daily expenses when their incomes were further reduced.

Kirkland emphasized that Urban Rampage "should have known better" and warned other businesses against using credit facilities in ways that could cause widespread harm.

Recent changes to Centrepay, effective November 3, have prohibited the purchase of items like household goods, sports equipment, and furniture through the program. Kirkland noted that ASIC's investigation likely influenced the federal government's decision to implement these reforms. "The writing was on the wall," he said, expressing satisfaction that the appeal was discontinued, reinforcing the stop order.

While Urban Rampage can no longer use Centrepay, it is still permitted to sell goods through other direct debit programs and Afterpay. The company’s website claims that its products are suitable for individuals seeking credit with limited recourse and no fees, provided they meet eligibility criteria.

ASIC has stated it will continue to monitor financial arrangements that pose risks to consumers. Kirkland mentioned the need to evaluate each arrangement individually, considering their terms and conditions.

In a statement, Coral Coast DC explained its decision to withdraw the appeal, citing recent federal government changes that promote a "fair and level playing field" for all businesses in the household goods sector. The company maintained that it has always complied with relevant laws and regulations, asserting that its services are interest and fee-free.

"ASIC's order was issued without any evidence of customer complaints, customer harm, or unconscionable conduct," the statement read. The company argued that for many in regional and remote communities, Centrepay was a safe and regulated option for purchasing essential items without resorting to high-cost credit alternatives.

Coral Coast DC expressed confidence in its direct debit payment processes, stating that customers are assessed individually by trained staff. The goal, they said, is to provide simple, responsible payment options that promote financial inclusion and protect customers with limited access to safe credit.

Veronica Johnson, a financial counselor in Kimberley, reported that many of her clients felt "taken advantage of" by such arrangements. She called for more stringent checks on customers' financial situations, warning that the new system could lead to further exploitation. "I think it's just opening another tap where there's going to be vulnerability involved and people will be taken advantage of," she said, adding that the true extent of the harm caused remains unknown until consumers can be consulted directly.