Proposed legislation will require 'buy now, pay later' (BNPL) services to run credit checks for new customers.
The background: The legislation, which was tabled by Assistant Treasurer Stephen Jones on Wednesday, aims to create stronger protections for those using credit lenders.
The government said the current laws mean that BNPL lenders do not have to complete affordability checks, like those essential for credit cards and other loans.
The key quote: "Our approach to better regulating BNPL strikes an appropriate balance between preserving the benefits of access to low-cost credit and addressing the risks of consumer harm," Jones said.
What else to know: A 2022 survey by the women and children's charity Good Shepherd found that 73 per cent of its practitioners said clients had missed essential payments, or cut back on or gone without essentials, to service BNPL debt.
The survey also found that 84 per cent of practitioners reported clients with BNPL debt have tried to manage the debt by opening additional BNPL accounts.
