AFIA welcomes BNPL Code Compliance Committee report on first year of self-regulation


14 March 2022

The Australian Finance Industry Association (AFIA) today welcomes the release of the first report of the independent Buy Now Pay Later (BNPL) Code Compliance Committee.

The Code Compliance Committee oversees the operations of the BNPL Code of Practice (Code), and investigates any complaints reported to it by consumers as part of a three-tier level of consumer protection; the first level being complaints made directly to the providers, the second level being escalated to AFCA as a dispute, and the third tier being those complaints lodged with the Code Compliance Committee.

The Committee is chaired by former long-term ACCC Deputy Chairman, Dr Michael Schaper, and also includes a consumer representative nominated by the Consumers Federation of Australia, Ms Jillian Brewer, and an experienced industry representative, corporate director and lawyer, Mr Craig Pudig.

It is one year since the world-first BNPL Code was implemented in Australia by AFIA on 1 March 2021, and this report provides a review of its first 12 months of operation.

The report provides an overview of complaints and alleged breaches of the Code and actions taken by the Committee to resolve these.

In addition, following completion of the annual re-accreditation process, all eight of the current Code signatories were confirmed to be compliant and were re-accredited for a further 12 month period. These are Afterpay, Brighte, Humm, Klarna, LatitudePay, OpenPay, Payright and Zip.

Diane Tate, CEO of AFIA, thanked Dr Schaper and the Code Compliance Committee and said its BNPL members remain committed to proactively delivering consumer protections that go above and beyond the law.

“I would like to thank the Code Compliance Committee for their oversight and commitment to improving the effectiveness and efficiency of the BNPL Code over a year of great change and economic and social instability.

“The Code was developed proactively by our BNPL members to provide a set of enforceable standards and protections BNPL customers can expect from their provider.

“The Code benefits consumers and merchants and should be viewed as a commitment by the BNPL sector to deliver high standards for customers. These protections will become even more important as Australians increasingly choose to adopt innovative products, like BNPL, to manage their money and cashflow,” Ms Tate said.

Dr Schaper said, “We are very encouraged by the engagement we have had with each of the BNPL Code signatories.

“In our work this year, we have seen low numbers of consumer complaints on BNPL – this includes complaints made directly to the BNPL providers, escalated to AFCA as a dispute, or complaints lodged with the Code Compliance Committee as a breach of the Code.

“Where complaints have been lodged with the Code Compliance Committee, we are pleased with the cooperation of the relevant providers in reviewing internal systems and processes to improve their own efficiency and effectiveness and deliver improved customer outcomes.

Diane Tate said, “AFIA strongly encourages BNPL providers to adopt a continuous improvement mindset and look for ways not just to comply with the Code, but to strive for industry best and better practice.

“AFIA also reminds consumers to seek out BNPL providers that are BNPL Code signatories to ensure they have access to higher consumer protections and enforceable standards in the event something goes wrong. Look for the ‘Code tick’ on the BNPL providers’ App or website.

“Importantly, ‘payday lending’ activities are not BNPL, and given reports of some recent marketing practices, we have specifically excluded such activities from the Code, so there is no confusion for customers,” MsTate said.

The Code is set to be reviewed at its two year anniversary, 1 March 2023, to ensure it continues to meet community expectations and the consultation process with stakeholders will commence later this year.

See Report


For further information contact:

Anna Fitzgerald

Executive Director, Communications & Strategy



AFIA is a leading advocate for the Australian financial services industry and represents over 130 providers of consumer, commercial and wholesale finance, acting to enhance competitiveness, support customers and facilitate innovation. Our members include banks, fintechs, finance companies, fleet and car rental providers who together are financing Australia’s future.

A BNPL Product or Service is:

  1. A shorter term product or service for the purchase of goods or services sold to consumers where the consumer repays the purchase in instalments. Consumers are informed by the BNPL Provider of the repayment amounts and payment schedule and will pay no interest charges for individual purchases if they pay within a specified period; or
  2. The provision of a credit contract for the purchase of goods or services. Some contracts require a minimum periodic repayment; others involve a fixed repayment plan for each purchase. Multiple advances of credit may be available. No interest is charged, and any fees for providing the credit are limited to $200 in the first year and $125 in each subsequent year; and
  • There is a contract between the customer and the BNPL Provider, and a contract between the customer and the Merchant or Retail Partner; and
  • The customer buys and receives goods or services from a Merchant or Retail Partner; the BNPL Provider pays the Merchant or Retail Partner for the purchase (minus merchant fees), and the customer repays the Buy Now Pay Later Provider for their purchase.

For the avoidance of doubt, the following are not considered a BNPL Product or Service for the purposes of this Code even if they are marketed or described as a BNPL product or service:

  • Products or services offered to persons or strata corporations that are predominantly for a purpose that is not a consumer purpose. ‘Predominant’ (as defined in s5(4) of the National Credit Code) means: (a) the purpose for which ‘more than half’ of the credit is intended to be used and (b) if the credit is intended to be used to obtain goods or services—the purpose for which the goods or services are intended to be ‘most used’;
  • Personal loans, mortgages or consumer leases;
  • Short term borrowing where a pay day lender typically provides small cash loans to individuals that are repaid at their next pay date; or
  • Any earned wage or salary access arrangement, where a lender has an arrangement with an employer to give an employee access to an amount they have earned during a pay period in advance of the normal payment date.

Code Compliance Committee

The CCC is independent and responsible for the annual accreditation of Code signatories and for compliance and enforcement. The CCC is chaired by Dr Michael Schaper, former Deputy Chair of the ACCC for ten years, and currently co-chair of the Australian Taxation Office’s Shadow Economy Advisory Forum; member of the University of Canberra governing council; and member of the national board of the Australian Institute of Company Directors.

Jillian Brewer is an experienced lawyer, conciliator, investigator and consumer advocate with more than 20 years in alternative dispute resolution. Jillian has held senior roles with industry ombudsman schemes in banking and telecommunications.

Craig Pudig is a lawyer with over 35 years’ experience in commercial law and the finance industry, specialising in dispute avoidance and resolution. He is a prior partner at Clayton Utz and was global head of disputes for Macquarie Capital.

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