‘BUYER beware’ is the message Legal Aid Queensland wants listeners to take away from its new podcast about buy now pay later services.
With buy now pay later services growing in popularity, Legal Aid Queensland’s lawyers are seeing clients who have accrued debts they can’t afford to pay back.
Legal Aid Queensland consumer lawyer Paul Holmes said consumers were attracted to buy now pay later services because of the easy approvals, no credit checks, no interest charges and instant access to goods and services with the ability to pay for it in instalments down the track.
“Unfortunately, these “drawcards” can encourage impulse spending and spending more than you can afford, leading to unaffordable debts,” Mr Holmes said.
“In our consumer protection work we’re seeing a lot of young people and young families who’ve gotten themselves into financial difficulty with buy now pay later services, paying for things like clothing, beauty treatments, haircuts, and basic household expenses. They will often also have significant other debt in the form of loans and credit cards.
“We’re seeing clients who’ve opened multiple buy now pay later accounts, have missed payments and are spiraling into debt.”
Our new podcast, The pitfalls of using buy now pay later explores some of the buy now pay later trends we’re seeing at Legal Aid Queensland, and talks about the fewer consumer protections available to people who get into debt with these services.
Mr Holmes said buy now pay later services did not charge interest but do charge administration fees and account keeping fees, and once you miss a payment you will be charged late fees – all of these fees can be quite substantial, especially on multiple accounts.
“Many buy now pay later users are not aware these financial products don’t have the same consumer protections as credit cards or personal loans,” he said.
“For example, buy now pay later services are not legally required to consider your financial hardship if you can’t afford to make payments.
“If you miss buy now pay later payments, these can be listed as a default on your credit report which will impact your ability to access credit in the future.”
The pitfalls of using Buy Now Pay Later is the latest podcast available in our Law For All podcast series. It’s available at lawforall.podbean.com or wherever you find your favourite podcasts.
If you’re having trouble paying your buy now pay later or other debts, you can get legal help from Legal Aid Queensland. Call us on 1300 65 11 88 to understand to your legal options or visit legalaid.qld.gov.au/Find-legal-information/Work-and-money/Money-and-debt/I-owe-money.