Australia should introduce tougher laws that protect consumers from unscrupulous lenders, pay-day companies and ‘buy now, pay later’ providers, lawmakers recommended in a report released on Friday following a four-month inquiry.
The bipartisan senate committee that conducted the inquiry said pay-day lenders and ‘buy now, pay later’ companies, which offer immediate credit with little or no checks, should abide by the same strict laws that force banks to lend responsibly.
“The ‘buy now, pay later’ sector is one of Australia’s fintech growth stories. This growth has largely outstripped the regulatory response,” the report said.
Other recommendations include introducing licensing requirements for the industry, prohibiting upfront fees for services, and closing loopholes that allow providers of payday loans and consumer leases to be exempted from the National Consumer Credit Protection Act.
“The committee recommends that the government implement a regulatory framework for all credit and debt management, repair and negotiation activities that are not currently licensed by the Australian Financial Security Authority,” the report said.
The report’s public release came a day after the corporate regulator said it was investigating share trading in Australia’s biggest ‘buy now, pay later’ company Afterpay Touch Group that occurred following the confidential release of the report to lawmakers earlier this week.