The passing of legislation extending the protection of national credit laws to consumers using buy now pay later (BNPL) services has been welcomed by the Australian Financial Complaints Authority (AFCA). 

“We welcome the passing of this important legislation, regulating BNPL as credit and requiring BNPL providers to be licensed,” AFCA’s Chief Ombudsman and Chief Executive Officer, David Locke, said.

“This legislation extends important consumer protections to BNPL users that have been available for other forms of credit. It also ensures any consumer using BNPL can come to AFCA, as an independent umpire, if they can’t resolve a dispute about BNPL transactions.” 

Mr Locke acknowledged that BNPL is a popular product that can benefit consumers but said the rise in complaints to AFCA about BNPL in recent years had underlined the need to review regulation.

AFCA has been able to register complaints in relation to a number of BNPL firms that have voluntarily joined its scheme. 

In 2023-24, AFCA received 1,929 complaints involving those BNPL providers, a rise of 16 per cent on the previous year. Complaints about credit reporting, unauthorised transactions, default listings, the interpretation of terms and conditions, and incorrect fees or costs were the top five issues in BNPL complaints in 2023-24.

Media enquiries: media@afca.org.au 

About AFCA 

The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent dispute resolution to individual consumers and small businesses when they are not able to resolve complaints directly with financial firms in banking and finance, insurance, investments and advice, and superannuation. AFCA aims to help the parties reach agreement, but it can issue decisions that are binding on financial firms.