The Australian Government has announced it plans to regulate the ‘buy now pay later’ (‘BNPL’) industry. The products are set to be classified as ‘credit’, meaning they will be subjected to similar restrictions as other financial services.
Assistant Federal Treasurer, Stephen Jones is concerned the current lack of regulation represents a loophole with regard to financial responsibility.
“We have heard people are opening multiple BNPL accounts, to access far more debt than they’d be able to get on a credit card or payday loan,” he said.
The proposed reform will imposed responsibility on industry giants, like Afterpay, to ensure appropriate processes are in place to deal with hardship and disputes. In addition, consumers will be subject to comprehensive checks on their ability to repay in a timely manner.
UOWTV reporter Patrick Lazarus, spoke to an Afterpay user, and Associate Professor in Law Andy Schmulow about the proposed reform and its implications.