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Speaker 1: Gone are the days when you actually have to pay

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Speaker 1: for your fuel and groceries. From now on, you can

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Speaker 1: a to pay it. It's that buy now, pay later service.

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Speaker 1: They've reversed their policy to not let users access their

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Speaker 1: service at the supermarket or petro stations. This is just

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Speaker 1: seven months after introducing the ban. Better yet, you can

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Speaker 1: no longer have to even make your first payment up front.

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Speaker 1: You can delay it for up to two weeks. Rock

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Speaker 1: up to the pump, flash the car boom, petrol s

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Speaker 1: in no money gone down for two weeks. Jake Lilly

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Speaker 1: is a senior policy advisor for financial mentoring charity FinCap.

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Speaker 2: Hello, Jake Jodder, how's it going?

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Speaker 1: Very good? This confuses me. Seven months ago it is

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Speaker 1: a bad thing. Now it's good. What change?

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Speaker 2: I'm not sure. I imagine you've gone to them for comments,

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Speaker 2: so I'll leave it to them. But yeah, it is

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Speaker 2: a real worry for the financial mentors we're working with. Obviously,

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Speaker 2: not a good time for people. People are desperate to

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Speaker 2: make ends meet, and unfortunately these sorts of loans can

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Speaker 2: get people on a pretty difficult treadmill of debt to

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Speaker 2: get off.

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Speaker 1: Okay, why should we banned people from doing it.

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Speaker 2: I don't think it's about banning in this instance. I

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Speaker 2: mean you could go down and use credit card to

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Speaker 2: purchase these things as well. The problem is you've got

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Speaker 2: more protections on the credit card. The law backs you up.

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Speaker 2: They can't put you into a loan that would have

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Speaker 2: been unaffordable from the start and then start charging you

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Speaker 2: fees and interest when they go to collect on it

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Speaker 2: when you're in that trap. So that's the real issue.

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Speaker 2: These sorts of loans aren't fully regulated like equivalent loans.

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Speaker 1: Well, I was going to say, how different is this

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Speaker 1: from paying for your groceries with your credit card?

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Speaker 2: Yeah, I guess you've got a credit card. That limit

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Speaker 2: that you've got on the credit card. They would have

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Speaker 2: checked that they're not trapping you beforehand with an affordability assessment.

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Speaker 2: But at the moment, by now pay later, aren't captured

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Speaker 2: by that. The new thing that's come up the government

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Speaker 2: was a bit cautious. There's a bill sitting there going

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Speaker 2: through Select committee that might eventually result and that protection applying,

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Speaker 2: so that we've all got it. But yeah, at the moment,

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Speaker 2: you're a bit more exposed if you use the service

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Speaker 2: and mentors are seeing the pain that comes with that.

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Speaker 1: Yeah, exactly. That bill would hand over credit lending enforcement

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Speaker 1: to the FMA instead of the ComCom. Would that make

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Speaker 1: a difference.

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Speaker 2: It would. It also hands over the power to decide

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Speaker 2: watson and what's out for our credit protections to the

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Speaker 2: FMA instead of the minister. So we're not trying to

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Speaker 2: go to an MP and get their attention about little

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Speaker 2: bits and pieces that sneak through the loopholes. Instead, it'll

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Speaker 2: be with a regulator with the expertise to keep an

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Speaker 2: eye on things where they're getting out of hand and

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Speaker 2: where there needs to be someone to step in. So

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Speaker 2: hoping that all goes through and it eventuates in the

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Speaker 2: right decision. So once we go through the I.

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Speaker 1: Made a mistake by actually casually using the word ban.

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Speaker 1: But what you would say is that you need to

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Speaker 1: say to have to pay that on a moral a

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Speaker 1: moral point, that this is possibly not good for those

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Speaker 1: people who are struggling to make Endsony, Yeah, it is.

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Speaker 2: It is really a worry when someone puts that food on. Obviously,

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Speaker 2: in two weeks time, if they're in the same position,

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Speaker 2: they go to buy food again, they've now got to

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Speaker 2: get end no food money, so everything starts going backwards

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Speaker 2: and it all gets harder. And what we see is

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Speaker 2: people trying to keep these buying our pay late accounts

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Speaker 2: as a lifeline, and they just get deeper and deeper

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Speaker 2: in thet They end up paying for these instead of

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Speaker 2: other essentials, skipping meals to pay them, keep them open.

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Speaker 2: It just gets worse and worse. So financial mentors really worry.

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Speaker 1: Jake, I thank you very much for your time. Jack Lily,

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Speaker 1: as the thin Cap senior policy advisor, he said, right

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Speaker 1: at the beginning, have you gone to after pay for

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Speaker 1: a reaction? Well, we've just got it, just got the

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Speaker 1: statement from after Pay. After Pay is evolving based on

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Speaker 1: customer feedback and strong merchant partnerships. The reintroduction of no

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Speaker 1: payment upfront for fuel and groceries gives customers greater flexibility

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Speaker 1: while maintaining our commitment to responsible lending. Using after pay

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Speaker 1: for every day spending is now mainstream, and by enabling

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Speaker 1: this feature through our trusted merchant network, we're meat seeing

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Speaker 1: customer demand with safeguards in place. And finally they say

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Speaker 1: they have no fees for those who pay on time,

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Speaker 1: offering a safe, interest free alternative to traditional credit cards,

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Speaker 1: who of course have high interest rates, helping consumers manage

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Speaker 1: every day spending responsibly. For more from Hither Duplessy Allen Drive.

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Speaker 2: Listen live to news talks.

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Speaker 1: It'd be from four pm weekdays, or follow the podcast

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Speaker 1: on iHeartRadio