“Recipe for disaster”: Consumer groups call for ad ban on BNPL for groceries, medicines

So-called “buy now pay later” arrangements for essentials such as food and medicines should be banned, consumer groups say.

Federal parliament is considering changes to credit laws that have not covered wage advances or the increasingly popular short-term form of borrowing that allows shoppers to obtain goods immediately but pay for them in instalments.

On Wednesday, providers told a parliamentary hearing the service could be a better option than high-interest credit cards or bank loans.

But financial counsellors warned of financial distress, with cash-strapped clients already behind on rent or their mortgage juggling more lines of credit and being stung by late fees.