New Zealanders are being asked to share their experiences with Buy-Now, Pay-Later products as the Government explores if more needs to be done to mitigate the risk of consumer harm, Minister of Commerce and Consumer Affairs, David Clark said today.
Buy-Now, Pay-Later (BNPL) is a relatively new, and fast growing credit alternative in New Zealand, which is particularly popular for online purchases. By using BNPL, people can get access to goods or services now but pay for them later in a series of instalments.
“The innovation is here and we want to make sure it’s serving consumers,” David Clark said.
Unlike credit cards and other forms of consumer credit contracts, BNPL providers are not required to comply with the rules under current consumer credit contract legislation. This is because BNPL contracts do not charge interest or fees (other than missed payment fees) or take a security interest over goods.
“I have heard from financial mentoring organisations that BNPL is creating financial hardship for some people. It is important to understand the extent of those harms and the actions that might best address them.
“That’s why I have launched this consultation today. The feedback received will help the inform Government and the way we address any potential triggers of hardship, and achieve an effective BNPL sector.”
A discussion document is available on the Ministry of Business, Innovation and Employment’s website, along with an easy-to-read summary document and an online survey where people can share their experience using BNPL.
“I want people who use BNPL to be confident and informed participants in a transparent, competitive and innovative sector.
“I encourage consumers, advocacy groups, businesses, BNPL providers and any other interested parties to submit their feedback and have their say,” David Clark said.
This consultation closes for feedback at 5pm, on Thursday 16 December.