Younger Australians are facing a credit crackdown as the government prepares to issue stricter regulations and rules for the buy now, pay later industry.
New users will face the necessity of a credit check and the need to prove their income.
“I think it’s an important piece of consumer protection,” Assistant Treasurer Stephen Jones said.
Millenniasl and Generation Z Australians are likely to be disproportionately affected, as they make up the majority of buy now, pay later customers.
Jones told the Herald that millennials were more likely to have a buy now, pay later account than a credit card.
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The legislation will reportedly come before parliament today.
It will require providers to have an Australian credit licence, be a member of the Australian Financial Complaints Authority, and have effective dispute resolution processes.
They will also have to check new customers’ financial statuses to ensure giving them credit is appropriate.
Providers also won’t be able to increase credit limits without customer consent.