Up to 100 customers of Smartbox sister company Tec Rentals may be able to keep their equipment without forking out another penny.
The Morning Advertiser has learned that Tec Rentals, which hired out TV-equipment direct to licensees, only obtained a consumer credit licence on 12 November 2005. The company has been trading since 14 April 2000.
Tec hired equipment direct to licensees who would not have been able to gain finance through third parties. It is the only arm of the venture, which included Smartbox and Vision Leisure Services, which is still trading. Its directors (currently and at the time of the unlicensed transactions) are Kate Venables (pictured), Neil Orton and Amanda Alston.
The MA has a record of 44 deals made before the company gained a licence but they could amount to 100.
"If no licence is in place, all agreements with sole traders and partnerships are potentially unenforceable," said Consumer Credit Trade Association regulatory policy manager Graham Haxton-Bernard. "Consumers could be relieved of further liability and be able to keep goods."
The agreements could only be ruled enforceable by the Office of Fair Trading (OFT) if it could be proved that no prejudice was caused to the consumer and agreements conformed to Consumer Credit Act regulations.
However, a leasing industry expert who saw the agreement thought the document Tec was using did not conform and was "totally illegal".
The maximum punishment for unlicensed trading is a two year custodial sentence and/or a fine.
The MA has contacted Tec for a comment but has received no reply.