Consumer groups have taken a step in the booming « buy now, pay later » sector to self-regulate, saying the new code does not go far enough.
News Corp Australia has received a draft Code, developed under the guidance of the Australian Finance Industry Association (AFIA), which sets minimum standards for the industry.
It is monitored by a Code Compliance Committee, which can « publicly name and shame » members in the event of serious violations.
The Code says that if new customers want to spend more than $ 15,000, they will face stricter reviews, including the BNPL provider, who will evaluate existing customer data and conduct a credit check to ensure customers can meet the repayments.
However, you are not required to conduct external audits if the transaction amount is less than $ 2000. This means they can continue to rely on their external systems to determine if a customer can use the service.
The draft code would require vendors to perform anti-money laundering identity checks, ensure customers can make their first payment upfront, and prevent consumers from making any further purchases if they are late with repayments. They are also banned from promoting their products to minors.
Some companies already follow many of the rules, such as: B. Afterpay, where the maximum transaction limit of $ 2000 is reserved for those who « have previously demonstrated a strong ability to repay ».
The Code also provides that signatories will not initiate bankruptcy proceedings against customers and will consider waiving fees and charges for those in financial difficulty.
It is understood that the committee is currently evaluating Afterpay, OpenPay, Payright, Zip, Brighte, Humm, Klarna and Latitude to ensure they can comply with the new rules.
Once approved, they log into the code and consumers know which vendors are following it from a logo displayed on their websites.
Consumer advocacy groups Choice, the Financial Rights Legal Center, Financial Counseling Australia and the Consumer Action Law Center said the code, due to be released next week, is a « positive » move, but more needs to be done.
They said BNPL providers were not required to have a credit license, and that meant the Australian Securities and Investments Commission couldn’t take enforcement action against them if they violated lending standards.
“BNPL vendors go a mile when they mention the word credit, telling their customers that the service is about better budgeting, but what they are telling retailers is much closer to the truth – that BNPL encourages people to do it to spend more, « said Australian CEO Financial Counseling, said Fiona Guthrie.
« What BNPL providers are really doing is turning a loophole into a gaping hole. »
Gerard Brody, CEO of the Consumer Action Law Center, said self-regulation is often a « fig leaf » and the Code does not require that « every BNPL loan is suitable and affordable for the individual customer. »
An AFIA spokesman said BNPL providers must meet « various legal and regulatory obligations » and have oversight from ASIC, the Australian Competition and Consumer Commission, AUSTRAC, the Australian Information Commissioner’s office and the courts.
They said the BNPL code is overseen by AFIA’s separate committee, which includes an independent chairman, a representative with industry and legal experience, and a consumer representative.
« This committee has oversight powers and a wide range of sanctions available to it for violations of the Code, including publicly appointing members who have committed a material breach. »
From shocking attacks on a stranger to abusing their role as a caregiver, to keeping pictures of child abuse WARNING: GRAPHICS
« For someone so alive and happy » Watching her fade away every day was just heartbreaking. “????
People and places
A young mother thought it was old milk, but the discharge from her nipples turned green. What came next put her life in a spiral of survival.
It’s an unwritten rule that the longer you live in a city, the more you become an authority on unofficial things like nicknames.
Fancy a tropical island weekend at Daydream or Fitzroy? What about a swim with turtles in Bargara or Cairns?
The airport has responded to calls from Mackay residents for more travel options.
A young Grasstree Beach father was charged with shooting and threatening a man before stealing his car.
A Telstra spokesperson was unable to provide a timeframe in which the services …
The Proserpine Police were called to the scene and found that walls, windows and doors …
He was accused of buying drugs from the dark net and selling them to others, but now …
© Mackay Printing and Publishing Company Pty Ltd 2021. Unauthorized reproduction is prohibited under Australian law and international treaty.
Donnez votre point de vue et aboonez-vous!
Votre point de vue compte, donnez votre avis
[maxbutton id= »1″]