Consultation opens on Buy-Now, Pay-Later proposed regulations

The Ministry of Business, Innovation and Employment (MBIE) is asking for feedback on details of the proposed regulations for Buy-Now, Pay-Later (BNPL).

In October, the Government agreed to apply the Credit Contracts and Consumer Finance Act 2003 (CCCFA) to BNPL. By applying the CCCFA, consumers using this form of credit will receive most of the same protections as borrowers in other credit contracts – like credit cards and personal loans. These protections will ensure consumers are better equipped to make informed decisions before using BNPL. It will also protect borrowers when issues arise, by requiring providers to have hardship processes in place and belong to a dispute resolution scheme.

Today, MBIE has opened consultation on the details, including a proposed threshold of $600 and the details of affordability assessments for loans over the threshold. This includes whether the affordability assessment should be required to follow the detailed procedure set out in the credit regulations.

Interested parties are encouraged to provide feedback to ensure the final details are workable in practice. Consultation is open for 10 weeks, closing on 24 February 2023. Following this consultation, it is expected that the final regulations will be made later in 2023.

Further information is available on MBIE’s website.

Exposure draft of Credit Contracts and Consumer Finance (Buy-Now, Pay-Later) Amendment Regulations 2022