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Good Shepherd submission on Buy Now Pay Later draft legislation

Treasury has released draft legislation on Buy Now Pay Later (BNPL), which will regulate BNPL as credit. Good Shepherd welcomes the draft legislation and applauds the Australian Government for bringing BNPL within a regulatory regime.

Good Shepherd’s practitioners repeatedly see the harms of unregulated BNPL supply, as outlined in our November 2022 Safety net for sale report. These harms include financial abuse via BNPL accounts. Almost 70% of surveyed Good Shepherd practitioners have seen BNPL-related financial abuse among clients with BNPL debt. This type of financial abuse can be perpetrated through coercion (i.e. where a person is forced to open a BNPL account for the benefit of the perpetrator), or by opening an account in the name of someone else, without that person’s knowledge or consent.

The draft legislation should be designed to prevent financial abuse via BNPL, and financial hardship. Good Shepherd therefore recommends adjustments to the draft legislation, focused on:

  • removal of the proposed presumption that BNPL products under $2000 are suitable for the requirements and objectives of the customer
  • verification of customer income
  • proper credit checks
  • removal of features that promote BNPL account increases
  • improved remedies in cases of financial abuse and other family violence.

In addition to our own submission, Good Shepherd supports the submission by the Economic Abuse Reference Group, of which Good Shepherd is a member.

Download Good Shepherd response to Treasury Laws Amendment Bill 2024 Buy Now Pay Later