Buy now pay later crackdown: Retiree dependent on Afterpay, Zippay and Hum fears new rules
Vulnerable retiree who relies on controversial ‘buy now, pay later’ services like Afterpay fears she will be without essentials amid severe new crackdown
- Pensioner afraid of financial future after BNPL action
- She has accumulated about $22,000 in debt
A struggling retiree has expressed concern that the threat of crackdown on controversial Buy Now Pay Later (BNPL) services will mean she can no longer afford essential items.
After leaving just $10 a week on her disability benefits, Mona Ibrahim turned to BNPL services — Afterpay, Zippay, and Hum — to make ends meet.
Although it started as a way to buy items she wanted, Ms. Ibrahim soon accumulated $22,000 in credit card, financial and BNPL debt across her three accounts.
She fears that the new crackdown on BNPL will result in her and others being left behind and unable to purchase items for a period of time.
The Albanian government has announced plans to classify BNPL services as a credit product, requiring operators of those services to hold an Australian credit license and adhere to standards of conduct.
Ms. Ibrahim’s two kidney transplants, two years of dialysis, and a $2,000 surgery have added to her crushing health bills.
She fears that she will have to pay more for groceries and bills during the cost of living crisis.
“Everything goes up. I’m afraid where we’re going to end up, we’re going to poverty,” Ms Ibrahim told A Current Affair.
She said she has become dependent on BNPL services as her disability benefits are not enough to cover basic needs such as groceries.
“I don’t think about myself, I think about everyone, I’ve seen a lot of people suffer,” she said.
Referring to Anthony Albanese’s winner’s speech, Ms Ibrahim said ‘you (Mr Albanese) promised us that you would not leave us behind, (that) you would help us’.
“You’re making it a nightmare for us, not a dream.”
Retired Aussie, Mona Ibrahim (pictured), fears for her financial future after a crackdown on buy-now-pay-later schemes could leave her unable to pay for essential services
Ms. Ibrahim has $22,000 in credit card, financial and BNPL debts and will be unable to pay it off on a disability pension that used to pay her about $10 a week
During the 2021-2022 fiscal year, more than 7 million BNPL accounts were active, generating more than $16 billion in revenue, an increase of 37 percent from the previous year.
These services are not regulated in the same way as credit cards, leading to a much greater financial risk for consumers.
Financial Services Secretary Stephen Jones said the changes were badly needed because there were “increasing threats to consumers, which have hitherto been largely unregulated and uncontrolled.”
“The plan will protect people from the spiral of harm that unregulated, unrestricted lending can cause,” he explained.
Mr Jones said it ‘looks like credit, it behaves like credit, it carries the risk of credit’.