Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Buy-now, Pay-later Raking In $10m+ In Late Fees Annually

A Consumer NZ survey has found buy-now, pay-later services are costing shoppers more than $10 million a year in late fees.

Close to four out of 10 Kiwi consumers usebuy-now, pay-laterservices, such as Afterpay, Laybuy and Zip.

Consumer NZ chief executive Jon Duffy said the payment option was heavily promoted with companies keen to emphasise it was interest-free. However, customers who couldn’t make repayments on time were charged late fees.

“Our survey found 14% of consumers had been stung with late fees. Based on the amount charged, we estimate late fees are likely to add up to more than $10m a year,” Duffy said.

Consumer NZ’s survey found buy-now, pay-later was particularly appealing to younger shoppers. Those aged 18 to 29 were more likely to be regular users, with clothing and footwear the top purchases.

However, close to one in five consumers were using the services to pay for essentials, such as groceries and car repairs.

Buy-now, pay-later customers aged 35 to 44 and single parents were more likely to have done so. They were also more likely to have incurred late fees.

About half (55%) of buy-now, pay-later customers said the payment option had also encouraged them to make purchases they would not otherwise have made.

Consumer NZ is calling for buy-now, pay-later services to be regulatedunder the Credit Contracts and Consumer Finance Act.

“Unlike other lenders, buy-now, pay-later companies aren’t covered by the act. That means there’s no legal obligation on them to ensure their lending is responsible and suitable for their customers,” Duffy said.

Buy-now, pay-later customers also didn’t have a right to a cooling-off period.

“With other products bought on credit, you get a cooling-off period where you can cancel if you change your mind about the purchase. But that’s not the case with buy-now, pay-later.”

Regulation of buy-no, pay-later services is also backed by FinCap, The Salvation Army, Christians Against Poverty and Debtfix.

About Consumer NZ’s survey

Figuresare from a nationally representative survey of 2000 New Zealanders aged 18 years and over. The survey was conducted in April and May 2021.

© Scoop Media

Business Headlines | Sci-Tech Headlines


BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>

Serious Fraud Office: Commences Enquiries Into Allegations Of COVID-19 Wage Subsidy Fraud
The Serious Fraud Office has commenced a number of enquiries into alleged abuse of the Government’s COVID-19 Wage Subsidy. Director Julie Read said the allegations relate to multiple complex cases of potential fraud that have been referred to the agency following extensive investigations ... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>

Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>

Transpower: Releases Independent Report Into Events Of August 9
Transpower’s Chief Executive Alison Andrew has today released an independent report into the grid emergency of August 9 when insufficient generation was available to meet demand, leading to some customers being disconnected... More>>