Many of our members work in the growing Buy Now Pay Later industry and we want to ensure your views are heard, the sector is appropriately regulated, and consumers are protected.
We recently made a submission to the Federal Government’s Inquiry into Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024.
This inquiry is considering amendments to the regulations covering the $19 billion Buy Now Pay Later sector.
In our submission, we’ve supported the proposal for a modified Responsible Lending Obligations (RLO) framework to cover Buy Now Pay Later providers.
The providers aren’t currently subject to these obligations, or other Credit Act requirements, and they don’t need to hold a credit license. This has created an unequal playing field as their mainstream lending competitors are required to meet RLO and Credit Act obligations.
We understand most Buy Now Pay Later providers have signed up to the Australian Finance Industry Association’s “Buy Now Pay Later Voluntary Code” but there are no criminal or civil penalties for members who don’t comply with their obligations. As the recent Banking Royal Commission demonstrated, a voluntary code doesn’t protect vulnerable consumers from predatory lending practices.
While we support the modified RLO framework, it may not reduce the risk for vulnerable consumers if a provider deliberately targets vulnerable communities with poorly designed products.
You can read our full submission here.
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