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Urban Rampage ramps up legal action against corporate watchdog

Brendan Foster -

A key retailer for First Nations people in regional Australia has ramped up its fight against the corporate watchdog, calling its decision to slap a permanent stop order on the company as "racist" and "paternalistic".

The Australian Securities & Investments Commission (ASIC) issued the ban against Urban Rampage's parent company Coral Coast Distributors on Wednesday, claiming it can no longer sign up customers into Centrepay credit arrangements in its stores.

Centrepay is a Federal Government scheme that allows people to buy essential goods and pay them off via regular deductions from Centrelink payments.

The decision comes after ASIC found that those arrangements were unsuitable for consumers in Coral Coast's target market because they were unlikely to be consistent with their financial situation and placed them at risk of financial hardship.

ASIC had previously placed two interim stop orders against Urban Rampage preventing them from having customers at its retail stores enter agreements to pay for goods on credit through Centrepay deductions.

At the time, ASIC said that nine of the 10 Urban Rampage's nationwide stores were involved in the alleged misconduct.

Now Urban Rampage lawyers are planning to take ASIC to the Administrative Appeals Tribunal and potentially launch a legal challenge under the Racial Discrimination Act 1975.

The lawyers plan to argue ASIC's ban would have discriminatory impacts if it disproportionately affected specific groups.

Urban Rampage issued a statement alleging ASIC was running an inherently racist test case of its powers and using First Nations people as guinea pigs.

"We have said from day one ASIC has been acting in a racist and paternalistic way towards First Nations people, who are largely our customer base, the statement read.

"One only has to read ASIC's reasons - which we have made public - to see none of what they are saying makes any sense.

"There are no complaints and no findings of unconscionable conduct.

"Yet ASIC has banned Centrepay because it thinks our customers are stupid, can't read, nor write and are incapable of making sound financial decisions.

"This case poses the question on whether ASIC's paternalistic, non-evidence based application of the Corporations Act 2001 violates the Racial Discrimination Act 1975."

ASIC commissioner Alan Kirkland said Coral Coast 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," Mr Kirkland said.

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

Mr Kirkland said addressing harm impacting First Nations Australians is a key priority for ASIC and it continued to work closely with financial counsellors and advocates in regional and remote communities to understand the challenges those communities face.

"Where ASIC sees conduct that places First Nations consumers at risk of financial harm, we will act to stop it," concluded Mr Kirkland.

Urban Rampage said ASIC never bothered to engage with any of its 20,000 customers.

It claims more than 1000 First Nations customers have signed a petition slamming ASIC's ban.

"Other non-Indigenous Australians have many ways to buy now and pay later," the statement read.

"First Nations people on benefits don't. ASIC is using its powers in a highly discriminatory way.

"Paternalistic policies, while ostensibly protective, can infringe on the autonomy and rights of individuals if they are based on assumptions about the capabilities or needs of certain groups without adequate evidence or consultation."

In early April, Alan Gray, managing director of the Broome-based financial counselling agency Bush Money Mob, told National Indigenous Times Urban Rampage's claims it was the "lifeline retail network for remote Indigenous communities in rural Australia" was incorrect.

"In Broome, where I live, there is an Urban Rampage store but there is also a Best and Less store, a Kmart, and a Red Dot shop, all selling very similar clothing, artificial funeral flowers, and household items like Urban Rampage," he said.

"There are also several op shops in Halls Creek, Derby and Nhulunbuy, where I have also worked… there are other shops selling similar products.

"I have extensive first-hand experience with Urban Rampage, and I remain just as alarmed about their business model and operating methods today, as when I first encountered them many years ago."

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