Consumer groups warn buy now, pay later (BNPL) providers will continue to exploit loopholes unless the federal government imposes stricter regulations to nip the next wave of credit products in the bud.
As a cost of living crisis continues to bite, consumer groups say BNPL providers – like ASX-listed Zip and US-owned Afterpay – should be forced to follow the same rules that apply to credit cards.
They have also called for a raft of additional safeguards, including a cap on late fees and charges, a ban on unsolicited offers to increase spending limits, and prohibiting BNPL debt being paid from a credit card, in a joint submission to the Treasury.
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In its December submission, the Public Interest Advocacy Centre said its research found that there was an increasing use of BNPL and similar credit products for essentials, including energy, and recommended that it should not be available for the payment of energy bills and consideration should be given to prohibiting their use to pay for other essential services.