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Appliance rental group Thorn Australia will have to pay a total $22.1 million in fines, fees and refunds after the Federal Court found it had lent to people without first finding out if they could pay.

Thorn, a subsidiary of Thorn Group (ASX:TGA) which owns brands such as Radio Rentals, agreed to the deal with ASIC in January.

On Wednesday, the Federal Court approved that deal which included a $2 million fine. It also ordered Thorn to pay ASIC’s $240,000 of costs.

The court found that Thorn’s consumer leasing businesses Radio Rentals, RR and Rentlo Reinvented had failed to try to verify the financial situation of its customers.

Thorn admitted in court that Radio Rentals had breached the National Credit Act four times in respect of each of the 275,060 consumer leases it entered into in from January 2012 to May 2015.

The full package of enforceable undertakings included $6.1 million in refunds and write-offs from default fees for an estimated 60,000 leases, and $13.8 million in refunds of excess lease payments.

ASIC said in January that Thorn had already paid $11.8 million of the $13.8 million in refunds.

“Today’s [Federal Court] penalty reinforces the need to uphold high standards of conduct in the consumer leasing industry,” said ASIC deputy chair Peter Kell.

“The law requires lenders to verify a consumer’s financial situation to make sure that consumers are not being put into unaffordable loans or leases.”

Thorn says it has co-operated at all levels of ASIC’s investigation and last year launched a credit assessment system.

It said in January that it had taken steps including using a new plain English contract by June this year, new internal dispute process, and new claims management and hardship policies.