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Submission to Treasury on draft laws to regulate buy now, pay later

April 2024

CHOICE staff
CHOICE staff

CHOICE has led a joint submission with 10 other consumer organisations providing feedback to Treasury on draft laws that would regulate buy now, pay later (BNPL) as credit. 

CHOICE welcomes the major step toward regulating BNPL the draft legislation represents and urges the Government to finalise these laws as a priority. 

The laws would introduce many vital consumer safeguards, including:

  • requiring BNPL providers to obtain a credit licence, empowering the financial services regulator ASIC to properly monitor BNPL loans
  • mandating that BNPL providers become members of the Australian Financial Complaints Authority, guaranteeing ombudsman access for BNPL customers to resolve disputes
  • setting a cap on the maximum fees that may be charged under a BNPL contract, including a cap on late fees
  • requiring BNPL providers to undertake a form of lending assessment, to reduce the risk people are signed up to repayments they can't afford

However, the draft laws are very complex and contain concerning concessions to the BNPL industry. Our submission makes a number of recommendations on how the laws could be improved to ensure BNPL products are safer by design, and BNPL lending decisions are based on more reliable information.

Download submission (PDF)

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