1 December 2020
In November 2020, the Australian Securities and Investments Commission (ASIC), the body that regulates consumer credit and financial services, released a report on the ‘buy now, pay later’ industry. ‘Buy now, pay later’ arrangements allow consumers to buy and receive goods and services immediately, and repay over time. ASIC’s report found:
- The buy now pay later industry is growing rapidly.
- About 20% of consumers are missing payments, so they incur missed payment fees and are reporting financial stress, and the number of consumers in this position is growing rapidly.
- There is a risk consumers are paying inflated prices under these arrangements.
While ASIC has powers of intervention for this industry, it supports self-regulation including through a code of practice. TasCOSS is wary of self-regulation by this and related industries. As we point out in a 2018 submission to a Senate Inquiry, ‘buy now, pay later’ and other consumer credit businesses can target customers in financial difficulties and there is evidence that they continue to do so even when there is clear evidence of financial and other harm.
Along with NILS Tasmania and Anglicare Tasmania, TasCOSS has advocated for much tighter regulation of the small consumer credit and consumer lease industries and strong consumer protections. Read TasCOSS’s 2018 submission.
Moneysmart.gov.au explains how ‘buy now, pay later’ services work and gives some tips on what to look out for if you use ‘buy now, pay later’ services.
NILS Tasmania is an excellent alternative to expensive ‘buy now, pay later options’. NILS Tasmania lends at no interest for essential items such as fridges, washers, furniture, education essentials such as computers and uniforms, medical and dental essentials and much more.