Community groups unite in call for urgent action on Buy Now Pay Later (BNPL) as the cost-of-living soars
Military charity Bravery Trust has joined more than 100 organisations in signing an open letter calling on the incoming Federal Government to make Buy Now Pay Later (BNPL) and wage advance products safer as a priority.
BNPL and wage advance products are unregulated credit products, using a loophole in Australia’s credit laws to bypass basic consumer protections – like assessing someone’s ability to repay or having hardship processes.
As cost-of-living surges, Bravery Trust CEO Belinda Wilson said more vulnerable members of the community were turning to BNPL and wage advance products to pay for essentials.
“We see the impacts daily amongst those who come to us in financial hardship,” Ms Wilson said
“Low income earners are taking on multiple BNPL debts that they cannot afford.
“Penalties escalate and eventually some of our most vulnerable community members are left choosing between putting food on the table or keeping roof over the head in order to meet the repayments.”
Bravery Trust provides financial aid to Aussie veterans who’ve been injured during service; and also has a Veteran Specific Financial Counselling Service to work longer term with veterans and their families.
The open letter has been initiated by Financial Counselling Australia, Anglicare Australia, CHOICE, Financial Rights Legal Centre and the Consumer Action Law Centre and is supported by a wide range of community groups including Bravery Trust.
ASIC’s research shows 20% of BNPL users cut back or went without essentials to make repayments.
CEO of Financial Counselling Australia Fiona Guthrie said: “We see first-hand the harm of unregulated BNPL and wage advance in our community.
“Our next Parliament must act to properly regulate these products to make them safer. We know these products cause harm. BNPL is credit and should be regulated like other credit products.”
Executive Director of Anglicare Australia Kasy Chambers said: “Our rules haven’t kept up, and unregulated lenders are taking advantage of the gap.
“We’re calling on whoever wins this election to bring in new protections that stop people from being stuck with debts they can’t afford.”