BSL joins community coalition calling for urgent action on Buy Now Pay Later products.
BSL has joined more than 100 organisations, signing an open letter calling on the next Parliament to urgently make Buy Now Pay Later (BNPL) and wage advance products safer.
BSL has long understood that financial security is essential to building a good life, but people on low incomes face more barriers to achieving it. As such, BSL has joined more than 100 organisations, signing an open letter calling on the next Parliament to urgently make Buy Now Pay Later (BNPL) and wage advance products safer.
Initiated by Financial Counselling Australia, Anglicare Australia, CHOICE, Financial Rights Legal Centre and the Consumer Action Law Centre, the letter has been endorsed by a wide range of community groups, including the Australian Council of Social Service (ACOSS), St Vincent de Paul, Youth Action, The Salvation Army, UnitingCare Australia, Wesley Mission, Tenants’ Union of NSW and Good Shepherd Australia.
The BNPL and wage advance industry is growing rapidly as the cost-of-living surges, with more people using these products to pay for essentials. BNPL and wage advance products are unregulated credit products, using a loophole in our credit laws to bypass basic consumer protections – like assessing someone’s ability to repay or having hardship processes. These loopholes are allowing BNPL providers to offer loans up to $30,000 without doing basic checks on whether people can afford it. Research from ASIC shows that one in five people with BNPL debts have cut back on essentials to make their repayments.
The open letter calls on the next Parliament to close these gaps and protect people from debts they can’t afford. Both products are causing harm, particularly for young people and those on lower incomes. We are seeing more people becoming overcommitted, sometimes with multiple accounts. ASIC’s research shows 20% of BNPL users had to make sacrifices or went without essentials to make repayments.
For example, one young person who recently called a financial counsellor has multiple BNPL debts totaling $8,000. Their only income is the Youth Allowance of $522 a fortnight.
People in financial stress and who may be struggling with BNPL and wage advance debts can contact a free and independent financial counsellor on 1800 007 007 or visit ndh.org.au
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