Legal Centre Calls For Buy-Now Pay-Later Crackdown
SYDNEY: Fintech operators like Zip and Afterpay are now worth more than retail giants Myer and David Jones, on the back of consumers enjoying the ease of use and flexibility – and while investors lap up the market.
However, they are facing calls for greater regulation, as Australia plunges deeper into recession and vulnerable consumers increasingly run the risk of falling into debt.
Speaking on an Australian podcast, Australian Financial Rights Legal Centre policy officer Julia Davis said that buy-now, pay-later providers are often attractive for younger consumers, given that they offer an alternative to a credit card – but those consumers often don’t realise exactly what they’re getting into.
“We‘ve seen plenty of examples of people who have had no income, and no ability to repay their purchases before they were approved, and they lose track of how much they owe,” Davis said.
Davis is calling for the providers to be licensed under the National Consumer Credit Protection Act, which includes complaint processes and regulation.