Government proposes new rules for buy-now-pay-later loans

The government may impose additional restrictions on Buy Now Pay Later loan applicants.

Governments want to screw up buy-now-pay-later loans to prevent consumers from falling into unmanageable debt.

It offers an affordable price check for Buy Now Pay Lay Later (BNPL) loans above $600, offering borrowers similar protections found in credit agreements.

Commerce and Consumer Affairs Minister David Clark said he also wants smaller loans below this limit, subject to comprehensive credit reporting.

“This is correct.

“As the global cost of living crisis puts pressure on New Zealanders and their families, especially as the Christmas season approaches, we are taking action to help them avoid unmanageable debt. I’m here.”

According to Clark, the amount spent on the BNPL loan was It jumped from $755 million in 2020 to $1.7 billion in 2021.

“For many people, BNPL is a convenient way to spread the cost of purchasing a large household, but it also prevents vulnerable people from spiraling into debt if lenders allow them to take on more than they can afford. I am trying to stop it.”

Providers are also required to undertake arduous processes and participate in dispute resolution schemes, while directors and senior management must be certified by the Commerce Commission to be suitable and suitable.

“By applying the Credit Contracts and Consumer Finance Act 2003 in an appropriate manner, we have struck an appropriate balance between protecting consumers and enabling continued access to low-cost credit. We will continue to do so,” said Clark.

The Department of Business, Innovation and Employment will begin consultations on the details of the proposal, including a proposed $600 threshold later this year, with the intention of introducing the regulation in 2023.

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