World news – Australia – says one in five consumers who buy now uses and later pay missed payments, ASIC says

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The Australian Corporate Supervisory Authority says that some consumers are forced to cut back on necessities such as meals because of the debt they have accumulated from using Buy Now and Pay later, warning one in five consumers against losing payments.

But the Australian Securities and Investments Commission (ASIC) has gone so far as to recommend that the sector be regulated in the same way as credit card companies, despite consumer advocates’ concerns that this is just another form of credit that people are allowed to take. Too much debt.

Long-awaited ASIC Industry Report said the total amount of credit offered in Purchase Now, Pay-later, Industry almost doubled in 12 months.

The number of Buy Now and Post Pay transactions increased from 16. 8 million in the 2017-2018 fiscal year to 32 million in the 2018-2019 fiscal year, which is an increase of 90 percent.

Missed Payment Fee Revenue For Everyone, Buy Now, Pay Later to Service Providers ASIC Looked at Increased 38 percent to $ 43 Million.

“Through our research, we also found that some consumers who use Buy Now and Pay Later arrangements face financial difficulties, such as reducing expenses or unavailability of necessities – for example meals – or obtaining additional loans, in order to buy now and make payments later. On time « .

“There is also a risk that consumers may pay inflated prices for some goods and services when using the Buy Now, Pay later order..

He said previously announced regulatory changes will affect the industry, with design and distribution commitments going into effect in October 2021.

“These commitments will require the industry to design purpose-built products that meet consumer needs,” ASIC said.

“They will also need to take steps to ensure that their products reach the right consumers.

The industry is also developing a code of conduct, but consumer protection advocates caution that self-regulation is not working.

The current ASIC review looked at the combined data from six Buy Now and Pay later providers and four major financial institutions.

The corporate watchdog said it has also commissioned research on consumers to help understand consumer behavior and experiences with arrangements to buy now and pay later.

The company provides credit for a range of services including home renovation, veterinary services, dental and eye care, major furniture expenses, and fertility services.

In Mrs. Carty’s case, she didn’t even know that the payment plan for the hearing aids she had bought for her son was through Humm.

She said she asked the salesperson at a Melbourne suburban store that bought the speaker from Bay Audio if they had a payment plan and they said yes.

It was 5:30 p.m. on a Friday and didn’t read the exact terms of the contract she was signing up for, indicating it will be a Humm payment plan.

Since the salesperson did not verbally tell her the fees or terms of the agreement when they signed it, she says it was a shock when she received an email late last year asking her to pay a little more than she expected. fifteen days.

She says she still pays for hearing aids and aside from the $ 8 monthly fee, none of the various late Humm fees have been charged because she pays every two weeks on time..

« I don’t mind paying, but what I object to is that it wasn’t clear what it was when I signed up, » she says, adding that it was the retailer’s fault..

Ms. Carty says her main problem with Humm is that their procedures for resolving customer complaints are difficult, time-consuming, and her employees are « rude and unhelpful. ».

Her main problem with Humm arose when she received a series of emails congratulating them on several purchases that the company said it had made in the Myer department store, but did not..

It turns out that someone hacked into her and other people’s accounts and made these purchases. But when she reported the incident, she felt she was a « criminal, » she says.

“I said there were four transactions in my account that I did not perform, and they said that I have to file a police report, submit two forms of identification and file a legal declaration,” she said.

“I thought it was outrageous. But because I didn’t want to pay for someone else’s purchases, I filed a police report and got it in December.

“I was hitting my head against a brick wall and getting no help from them at all.

To obtain a solution, I decided to contact consumer groups and file a complaint with the Australian Financial Complaints Authority.

Mrs. Carty says that up until that point she had to contact Humm through the chat service, but once she lodged a formal complaint, she got a call from them..

“[Humm’s rep] told me it was my fault because of the password that I had,” she said.

“Someone hacked the entire system and made a lot of purchases on other people’s accounts.

“But then he said he would take the purchases [worth $ 1,500] from my account,” adding that Humm has since strengthened security, and now has a two-step verification process..

FlexiGroup CEO, Rebecca James, said financing now, pay later was an « affordable and flexible financing option » for consumers..

She said that while “identity theft can cause anxiety and anxiety,” it was unfortunate that this happened, Ms. Carty’s case was resolved within four days, with the AFC confirming that the matter was resolved upon filing the complaint.. .

Mrs. James said that there was no « systematic piracy » of the company’s systems, and in « the extremely rare cases where a customer’s identity is fraudulently seized, [FlexiGroup] follows best-practice protocols requiring police reporting and customer declaration as standard. ».

This service may contain material from France Press (AFP), APTN, Reuters, AAP, CNN, and BBC World Service which is copyright and cannot be reproduced..

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Australian Securities and Investments Commission, Payment, Financial Services, Consumer