BNPL CCC report on self regulation
1 June 2023
The Buy Now Pay Later Code Compliance Committee (CCC) annual report revealed:
90% of active Buy Now Pay Later (BNPL) accounts in Australia are protected by the high industry standards and consumer safeguards offered under the BNPL Code.
The rate of EDR complaints per customer remains low at 0.05 per 1,000 customers.
The report also found that almost 98 per cent of financial hardship requests were approved.
The Code has shown itself to be a leading example of self-regulation in the BNPL sector and gives customers the confidence in the industry and will continue to evolve alongside innovation and Government regulation.
AFIA today said its Buy Now Pay Later Code of Practice is successfully protecting Australian consumers according to the latest report from the independent Buy Now Pay Later Code Compliance Committee (CCC). The CCC’s report covers the period from 1 March 2022 to 28 February 2023.
The CCC’s report has shown how the Code is a leading example of self-regulation in the BNPL sector and gives customers the confidence that the industry wants to work constructively to achieve customer-centric operating models,” said AFIA CEO, Diane Tate.
The Code was introduced by AFIA in March 2021 and two years later, approximately 90 per cent of active Buy Now Pay Later (BNPL) accounts in Australia are protected by the high industry standards and consumer safeguards offered in the Code.
“The Code has demonstrated its ability to protect consumers, particularly regarding its commitments to external dispute resolution (EDR) and financial hardship assistance,” Ms Tate said
“The BNPL CCC was established as an independent committee to administer and enforce compliance from code signatories. AFIA understands that self-regulation is an important part of any regulatory framework, and this annual report assesses compliance with industry codes to continue driving best practices throughout the BNPL sector,” Ms Tate said.
The report shows that the rate of EDR complaints per customer remains low, having increased marginally from 0.03 complaints per 1,000 customers in the first quarter of 2022 to 0.05 per 1,000 customers at the end of the third quarter.
The report also found that almost 98 per cent of financial hardship requests were approved. Just over 2 per cent of requests were abandoned, meaning the customer decided not to proceed or did not respond to an offer of assistance made and only 0.04 per cent of requests were declined.
The CCC received 17 reports about alleged breaches of the Code, in the context of approximately 110 million BNPL transactions that took place over the same period.
Ms Tate said the findings within the report highlight the industry’s commitment to maintaining high standards of fairness and honesty while not undermining efficiency or ease of use for BNPL customers.
Throughout the year, the CCC liaised with consumer groups, industry, and regulators to promote the Code and ensure it continues to meet the expectations of external stakeholders, such as ASIC and the ACCC. The CCC also engaged with Promontory as the independent reviewer of the BNPL Code earlier this year.
“The BNPL Code has been developed in a way that will continue to evolve alongside innovation and Government regulation,” Ms Tate said.
“As BNPL continues to grow within the Australian digital economy, AFIA and Code signatories are committed to ensuring consumers are protected without reducing competition, choice, and innovation across the sector,” Ms Tate concluded.
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