Consumer Credit Legal Services (WA) Inc. has drafted submissions on behalf of the Consumers’ Federation of Australia and its members to the independent review of the Australian Finance Industry Association (AFIA) Buy Now Pay Later Code of Practice (the Code).
BNPL products fall within loopholes in the law and as such, providers are not subject to responsible lending obligations, which means that they are not required by law to consider a person’s financial situation before providing them with a BNPL account. This under-regulation of the industry has led to an increase in financial hardship and defaults within it.
The submission outlines some general observations around key consumer issues emerging from the use of BNPL products and makes 50 recommendations for changes to the Code to improve consumer outcomes.
In our submission we incorporated numerous case studies as examples of our experiences with vulnerable consumers that have fallen into financial hardship after entering a BNPL contract.
To read the submission, click here.