Good Shepherd, Australia’s oldest charity supporting women, girls, and their families, today welcomes the federal government’s announcement to regulate Buy Now Pay Later (BNPL) under the Credit Act.
Good Shepherd Director, Research, Advocacy and System Impact, Dr Ros Russell said that while the details of the reforms remain to be seen, regulation will be a game changer for protecting people, particularly women, from coercive, fraudulent, and unaffordable debt.
“Today’s announcement is a show of leadership by the federal government,” Dr Russell said.
“They are recognising the well-established links between economic insecurity, Buy Now Pay Later products and family violence, which we increasingly see amongst our clients.”
Good Shepherd’s report on BNPL draws on unique client data and financial counsellors’ insights to highlight the harms of the unregulated products, particularly among women, sole parents, and family violence victim-survivors.
“We want to see the right safeguards put in place to prevent our clients from drowning under a mountain of unmanageable debt or being coerced by their partner to take out multiple BNPL debts.
“We stand ready to work with the government to develop appropriate regulatory safeguards, to ensure we are protecting women from coercive and fraudulent debt.
“Regulation of BNPL is critical. We also need to address the drivers of credit use: the grossly inadequate social safety net. Recent increases in social security payments were welcome, however they were not enough to alleviate people experiencing poverty.
“We also know that people are going into debt to set up a new life after family violence. No one should have to foot the bill for abuse they have experienced,” Dr Russell added.
“We are also indebted to the tireless and coordinated advocacy for the regulation of BNPL from Financial Counselling Australia, CHOICE, Consumer Action Law Centre, and Redfern Legal Centre amongst others.”
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