Latest news with #StephanieTonkin
Herald Sun
10-06-2025
- Business
- Herald Sun
Aussie consumers warned over ‘dangerous' wage advancing pay trend
Don't miss out on the headlines from Business Breaking News. Followed categories will be added to My News. Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said. Originally published as Consumer advocates warn Aussies about 'dangerous' wage advancing products and call for further regulation
News.com.au
10-06-2025
- Business
- News.com.au
Consumer advocates warn Aussies about ‘dangerous' wage advancing products and call for further regulation
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
Perth Now
10-06-2025
- Business
- Perth Now
Aussies warned over new pay trend
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. Consumer advocates have warned the wage advancing products are sending thousands into debt spirals. NewsWire / Nicholas Eagar Credit: NewsWire 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. Buy now, pay later products face regulation under the Credit Act from June 10. NewsWire / Gaye Gerard Credit: News Corp Australia 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
West Australian
10-06-2025
- Business
- West Australian
Consumer advocates warn Aussies about ‘dangerous' wage advancing products and call for further regulation
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act , a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
Sydney Morning Herald
09-06-2025
- Business
- Sydney Morning Herald
The big change coming to your buy now, pay later options today
If existing Afterpay customers want to raise their spending limit, they will also be required to have a credit check. The company is not required to verify customers' declared income. Saadat said this reflected the spending limits it offered, and the fact it would be doing a credit check on customers. Afterpay currently has credit limits of $3000, or $4000 for people who request an increase. Loading Zip, a rival BNPL firm, said its Zip Pay product would now be regulated, while three other products it provides are already regulated. 'Zip welcomes the new buy now, pay later legislation in Australia and the introduction of these standards, which are aligned with Zip's existing practices,' a Zip spokesperson said. Afterpay, the biggest BNPL firm in Australia, was formed in late 2014. It expanded rapidly, with digital payments surging as online shopping boomed during the COVID-19 pandemic, before being bought by Block in a deal that valued Afterpay at $39 billion at the time. Banks have also sought to copy the BNPL model, with Commonwealth Bank launching its own product in 2021 and investing in Swedish BNPL firm Klarna. While consumer groups have long accused BNPL firms of exploiting loopholes in the credit laws, Labor last year said its BNPL laws sought to balance consumer protection, innovation and competition. The chief executive of the Consumer Action Law Centre, Stephanie Tonkin, said the new regulations would result in a 'very light touch' credit approval process for people seeking less than $2000. 'I think we will continue to see plenty of buy now, pay later facilities being approved up to $2000,' she said. 'It's a very, very common form of credit. It's always been very accessible. Now we are going to see some level of checking and verification of affordability.' Afterpay on Tuesday released research it commissioned, which showed its customers had an average credit score slightly lower than that of credit card applicants, but higher than personal loan applicants. Payments expert Lance Blockley, managing director at The Initiatives Group, said the new regulations would probably have a limited impact on Afterpay and Zip in the short term because the changes applied to new customers, rather than existing customers. 'Everybody who wants to have a BNPL account in Australia has probably already got one. It's like closing the stable door after the horse has bolted,' Blockley said. BNPL firms were more focused on signing up more Australian merchants to accept BNPL payments, he said, as well as expanding in the more lightly regulated US market.
