The Australian Finance Industry Association,which represents BNPL operators,said it supported all the recommendations of the review,which did not deal with the highly contested issue of whether customers should be subject to thorough affordability checks.
Several of the recommendations focused on the industry’s dealings with vulnerable customers,afterconsumer groups said BNPL products were commonly used by people who could be disadvantaged,including those on low incomes.
The review,by consultancy Promontory,said the code should encourage BNPL firms to be more proactive in dealing with vulnerability,and it should “introduce specific and clear commitments to assist people experiencing vulnerabilities”.
The review also said the industry should consider introducing a code provision to improve the accessibility of hardship support schemes for vulnerable customers.
The review said the key challenge for the BNPL firms was translating these commitments into “meaningful actions that support better customer outcomes in a practical sense”.
It also pointed to inconsistencies across the industry. For example,the code has a 21-day timeframe for hardship assistance requests to be met,but the review found one unnamed BNPL firm took an average of 64 days to resolve hardship claims.
BNPL products are short-term instalment loans that compete with credit cards,but because they are not technically credit under the law,they can be approved without a credit check.