If you’ve ever bought a fridge, washing machine, or even a mobile phone through a ‘buy now, pay later’ scheme, you might want to check your receipts.
The convenience of these payment options has become increasingly popular, but a recent development suggests that some consumers may have paid more than anticipated.
One of Australia’s major online retailers, Snaffle, is in hot water after the corporate watchdog, ASIC (Australian Securities & Investments Commission), accused the company of overcharging more than 40,000 customers, sometimes by thousands of dollars.
What’s the story?
Snaffle, a well-known retailer for electronics and household goods, offers customers the option to pay for big-ticket items in weekly instalments over several years.
On the surface, it sounds like a great way to spread out the cost of essential items. But ASIC alleges that Snaffle has been inflating prices and charging excessive interest—well above what’s allowed by law.
In one jaw-dropping example, a customer ended up paying over $4000 for a mobile phone that was worth less than $1500 at retail.
In another, a 35L fridge cost a customer $835 more than it should have. These aren’t just rounding errors—they’re serious overcharges that add up, especially for people already doing it tough.
What did Snaffle allegedly do wrong?
Australian law caps the amount of interest that can be charged on a credit contract at 48 per cent. But ASIC claims Snaffle found a way around this, charging between 60 and 103 per cent in some cases.
Instead of calculating interest on the reducing balance (as you’d expect, since the value of the product goes down over time), Snaffle allegedly charged a flat interest rate on the full purchase price for the entire contract period.
ASIC Deputy Chair Sarah Court didn’t mince words: ‘ASIC alleges Snaffle charged customers a substantial markup on products, as well as a delivery fee they did not incur, operating costs, a profit margin and additional adjustments—all before significant interest was applied, resulting in an unlawful credit contract.’
The regulator is now seeking a significant penalty in court, especially given the impact on vulnerable Australians who may have felt they had no other option.
What are your rights?
If you’ve used Snaffle or a similar service, you might be wondering if you’ve been overcharged. The good news is, you have rights.
If the court finds Snaffle guilty, affected customers could be entitled to refunds or compensation. Even if you’re not sure, it’s worth checking your old contracts and statements.
Consumer Action Law Centre chief executive Stephanie Tonkin says there are better alternatives out there: ‘There’s a no-interest scheme to help you access a fridge, or other white-goods, or other essential items.’ These schemes are designed to help people get what they need without falling into a debt trap.
What should you do if you’re affected?
Check your paperwork: Look at your Snaffle contracts and compare the total amount paid to the retail price of the item.
Contact Snaffle: If you think you’ve been overcharged, get in touch with their customer service team and ask for a breakdown of your payments.
Seek help: If you’re struggling with debt or need advice, the National Debt Helpline is a fantastic resource. Call them on 1800 007 007 for free, confidential advice.
A bigger issue for older Australians
For many, these ‘rent-to-own’ or instalment schemes can seem like a lifeline—especially if you’re on a fixed income or pension.
But as this case shows, they can come with hidden costs that leave you worse off in the long run. It’s always worth shopping around, reading the fine print, and considering alternatives like no-interest loans or community support programs.
Have your say!
Have you ever used Snaffle or a similar service? Did you feel you got a fair deal, or were you left with a sour taste? We’d love to hear your experiences—good or bad. Share your story in the comments below, and let’s help each other make smarter choices.
And remember, if you’re ever unsure about a financial product or service, don’t be afraid to ask questions or seek independent advice. Your wallet—and your peace of mind—will thank you.
Also read: End of the road for Catch.com.au: What’s next for Aussie online retail?
