FinCap welcomes the opportunity to comment on the Ministry of Business, Innovation and Employment (MBIE) Draft Credit Contracts and Consumer Finance (Buy Now Pay Later) Amendment Regulations 2022 (Draft Regulations). Loopholes for buy now pay later lenders have been financial mentors’ most regularly noted consumer protection gap in recent years. We strongly support extending the Credit Contract and Consumer Finance Act’s (CCCFA) requirements to this form of lending.
However, the framework of a threshold amount for lenders being required to complete robust affordability assessments should not be implemented. Instead, total coverage for such requirements would actually address clearly identified issues surrounding simultaneous loans across multiple providers. We also recommend some adjustment to drafting to avoid the creation of further loopholes where the harm identified from this lending could go unchecked.