They come into force in accordance with the table in reg 2, on Jun. 10, 2025.
Document dated Mar. 7, 2025, was added on May 12, 2025 due to editorial backfill.
On Feb. 5, AST GVT issued proposal re low cost credit regulations.
AST GVT sought views on the draft National consumer credit protection amendment (low cost credit) regulations 2025 to support new BNPL legislation (see #214874).
The proposed regulations concern buy now pay later (BNPL) credit, aiming to implement flexible, proportionate regulation of BNPL sector per consumer harm risk.
Follows AST ASIC Jan. 2025 guided on requirements for BNPL providers, see #240540.
Key Provisions
Medical financing arrangements at no cost to consumer exempted from BNPL definition where the merchant is a related body corporate of the BNPL provider, the service qualifies for Medicare benefits, and the credit is provided at no cost to the consumer.
Introduces fee caps for low-cost credit contracts; non-default fees capped at AUD 200 for first period, AUD 125 thereafter; default fees capped at AUD 120 generally, or AUD 320/245 if only default fees apply; fee periods 12 months from earliest contract date.
Requires credit providers to conduct credit report checks for contracts AUD 2k or greater, make inquiries about consumer income, expenditure, and existing credit, as well as maintain and regularly review their relevant unsuitability assessment policies.
