The difference between "unlawful" and "illegal" matters. This is why.
There is an example of why the difference is important in the new Australian case of ASIC v Rent4Keeps.
The facts are that a company, Rent4Keeps operated a scheme that it said was for the renting of domestic appliances where it was actually a form of hire-purchase.
The company granted a number of franchises around Australia including to its largest franchisee Darranda Pty Ltd. That company - in three months in 2019 - entered into 516 agreements that it termed "lease."
But the agreements were credit arrangements under which the borrower retained the goods, which is not a feature of a rental or lease agreement. As a lease, the charges could be more than 48% which is the cap under a credit agreement as determined by The Credit Act.
The result of this was that customers paid more than the Act would have allowed them to pay.
"Consumers typically paid more than four times the market price for everyday consumer goods, such as mobile phones and whitegoods. For example, one of the unemployed consumers was charged AUD4,095 over 18 months for a vacuum cleaner that could have been purchased for AUD999."
There's an awful lot of comment about business practices and vulnerable people in ASIC's note about the case but one thinig stands out : the judge is reported as saying "The failure to comply was a result of a breach of the standard of competence required to engage in licensed credit activities “efficiently, honestly and fairly.”’
And ASIC says "ASIC will seek financial penalties against Rent4Keeps and Darranda."
So what is missing? It's any mention of a crime.
Why does that matter to financial crime practitioners? It's because
a) the company has not committed a predicate crime for money laundering purposes.
b) if lawyers advised on such a scheme, they are not liablle as faciliators; and
c) banks etc. (Including CentrePay who processed payments) did not have possession custody or control of the proceeds of a predicate offence.
While civil penalties may be sought, there is no provision for confiscation.
So:
Illegal: fines and jail; confiscation; related money laundering offences.
Unlawful: civil penalties if the company is still extand and solvent.
Link to ASIC's note: https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-re…
Link to judgment: https://download.asic.gov.au/media/0vkjdoxr/24-194mr-asic-v-darranda-pt…
