Buy now, pay later firms such as Afterpay have committed to disclosing caps on their late fees and carrying out mandatory checks on the finances of customers borrowing larger amounts under an industry code taking effect today.
AFIA chief executive Diane Tate said the code compliance committee would have the power to force BNPL providers to make changes to their systems, conduct extra training of staff, or name and shame firms that broke the code. For transactions between $2,000 and $15,000 BNPL firms are committing to using at least some external data, such as a bank statement, in their assessments. For transactions between $15,000 and $30,000 there is a commitment to use two external data sources.
A coalition of leading consumer groups last week reaffirmed their call for BNPL to be regulated as credit, with Consumer Action Law Centre chief executive Gerard Brody saying the code did not require every loan to be suitable and affordable to the customer.
clancyyeates These BNPL businesses must be paying their lobbyist a king's ransom to entertain government members. The public is not winning while they self regulated.
clancyyeates Afterpay are the Uber of the finance industry. Tighter regulation for the incumbents while the new kids self regulate and millenials just get into more and more useless debt.
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