Consumer groups welcome passing of buy now, pay later regulations
Key loophole in credit laws will be closed
Consumer groups have welcomed the passing of the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 (BNPL Bill) through the Senate last night and all of Parliament this morning.
The BNPL Bill will bring buy now, pay later services within the national credit laws, so that most consumer protections that apply to other credit products will also apply to BNPL.
Quotes attributable to Stephanie Tonkin, CEO, Consumer Action Law Centre:
“We have fought long and hard to have Buy Now Pay Later treated like other credit products, so the passing of laws yesterday is welcome news. Regulating BNPL products couldn’t be more important in a cost-of-living crisis. We observe BNPL being used to afford essentials like food, and easy access to multiple BNPL accounts has intensified the ‘money juggle’ for the many families that we help.
“There are compromises in the laws, so we will be monitoring the impacts on consumers to understand how effective these new guardrails will be in stopping the people we help falling into unaffordable debt spirals. The proof will soon become clear in the coming months and years.”
Quotes attributable to Ashley de Silva, CEO, CHOICE:
“Consumer groups have been calling for regulation of buy now, pay later for years. We congratulate the Government on passing these very important laws that will help make BNPL loans safer and fairer.
“The new laws will greatly reduce the risk of people being signed up to unaffordable BNPL loans that leave them worse off. It also ensures customers can take disputes with BNPL providers to the financial complaints body and have their complaint fairly heard.”
Quotes attributable to Karen Cox, CEO, Financial Rights Legal Centre:
“Today is a positive day for Australian consumers with the passing of laws to treat Buy Now Pay Later as what it really is – credit. The important guardrails that these laws introduce will go a long way to reigning in some of the unaffordable lending practices that we have seen and will help people spread their expenses without getting into problematic debt.
“Our world leading responsible lending regime has protected Australians from being laden with unaffordable debt and shielded our banks and economy when hard times invariably hit – including the current ongoing cost of living crisis. It is good to see positive steps towards addressing what has been a huge and illogical loophole.
“We also welcome these laws as they will be flexible enough to address other developing credit models like wage advance that we are hearing more and more on our phone lines without major legislative change being required.”
Quotes attributable to Domenique Meyrick, Co-CEO, Financial Counselling Australia:
“Financial counsellors welcome this news. Our sector has wanted buy now pay later products treated as credit since they were first introduced in Australia.
“Financial counsellors see the harm buy now pay later products can cause and these new laws will go a long way to protect consumers from getting into unnecessary debt.
“While we welcome this change, we are still concerned about what this will mean for accounts under two thousand dollars. Many people have multiple, small amount accounts and these are getting some into debt spirals.”
ENDS
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567, media@consumeraction.org.au
