RLC submission: Code of Practice for Buy Now, Pay Later Providers

Redfern Legal Centre (RLC) has provided a response to the Australian Finance Industry Association’s (AFIA) Code of Practice for Buy Now, Pay Later Providers.

RLC regularly assists people who present with debt and financial abuse issues that steam from various Buy Now, Pay Later providers. 

In this submission, RLC endorses the joint submission coordinated by Consumer Credit Legal Service (WA) Inc. In addition, we provide a number of recommendations specifically in relation to financial abuse.

From our experience communicating with providers, we are concerned about a general lack of awareness about family and domestic abuse issues. RLC’s recommends that the Code should have a specific section on family and domestic abuse, and within that, we submit the following issues should be addressed:

  1. A requirement for each provider to develop and publish a policy on how they will safely support and deliver trauma-informed customer service to people who are known or suspected to be experiencing family and domestic abuse.
  2. A requirement for mandatory annual training on family and domestic abuse for both customer-facing and non-customer facing staff (including staff that design the products and services).
  3. The steps providers must take to verify the identity of the person applying for the Buy Now, Pay Later product.
  4. Guidance on the amount and type of evidentiary material that providers can request when determining complaints or hardship applications on the basis of family and domestic abuse. This should be informed by consultation with domestic violence sector experts in each of Australia’s state and territories, because each jurisdiction has different laws which dictate when judicial or police evidence is able to be obtained.

A case study is included with RLC’s submission to demonstrate how Buy Now, Pay Later schemes can be used as a tool by perpetrators of financial abuse.

Hannah's story:

Hannah* was emotionally and financially abused in her relationship for many years. When she eventually fled to another state, the financial abuse continued. Months after she relocated, Hannah discovered that her ex-partner had created a Buy Now, Pay Later account in her name. She had no knowledge this account existed until she was being chased by the company to pay thousands of dollars for purchases she never made or benefitted from.

When Hannah presented to RLC, she was stressed and afraid. English was her second language so we assisted Hannah to investigate the account and check her credit report. This uncovered more Buy Now, Pay Later accounts in her name that she had never taken out. From the documents obtained from the Buy Now, Pay Later companies, it was clear her ex-partner had fraudulently created the accounts and an email address in Hannah’s name.

*Identifying details have been changed.