Jack Lilley: FinCap Senior Policy Advisor on Afterpay allowing users to use their service for groceries and fuel

Concerns are being raised now that people can put groceries and petrol on Afterpay. 

The popular buy now, pay later scheme is allowing people to buy petrol and grocery items up to $500 without an up-front payment – to be paid back in instalments. 

FinCap Senior Policy Advisor Jake Lilley told Andrew Dickens it is a real worry for financial mentors. 

He says people are desperate to make ends meet and unfortunately schemes like this can put people in a cycle of debt. 

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Episode Transcript

Speaker 1 (00:00):
Gone are the days when you actually have to pay
for your fuel and groceries. From now on, you can
a to pay it. It's that buy now, pay later service.
They've reversed their policy to not let users access their
service at the supermarket or petro stations. This is just
seven months after introducing the ban. Better yet, you can
no longer have to even make your first payment up front.

(00:21):
You can delay it for up to two weeks. Rock
up to the pump, flash the car boom, petrol s
in no money gone down for two weeks. Jake Lilly
is a senior policy advisor for financial mentoring charity FinCap.

Speaker 2 (00:33):
Hello, Jake Jodder, how's it going?

Speaker 1 (00:36):
Very good? This confuses me. Seven months ago it is
a bad thing. Now it's good. What change?

Speaker 2 (00:42):
I'm not sure. I imagine you've gone to them for comments,
so I'll leave it to them. But yeah, it is
a real worry for the financial mentors we're working with. Obviously,
not a good time for people. People are desperate to
make ends meet, and unfortunately these sorts of loans can
get people on a pretty difficult treadmill of debt to
get off.

Speaker 1 (01:00):
Okay, why should we banned people from doing it.

Speaker 2 (01:05):
I don't think it's about banning in this instance. I
mean you could go down and use credit card to
purchase these things as well. The problem is you've got
more protections on the credit card. The law backs you up.
They can't put you into a loan that would have
been unaffordable from the start and then start charging you
fees and interest when they go to collect on it
when you're in that trap. So that's the real issue.

(01:27):
These sorts of loans aren't fully regulated like equivalent loans.

Speaker 1 (01:32):
Well, I was going to say, how different is this
from paying for your groceries with your credit card?

Speaker 2 (01:38):
Yeah, I guess you've got a credit card. That limit
that you've got on the credit card. They would have
checked that they're not trapping you beforehand with an affordability assessment.
But at the moment, by now pay later, aren't captured
by that. The new thing that's come up the government
was a bit cautious. There's a bill sitting there going
through Select committee that might eventually result and that protection applying,

(02:01):
so that we've all got it. But yeah, at the moment,
you're a bit more exposed if you use the service
and mentors are seeing the pain that comes with that.

Speaker 1 (02:09):
Yeah, exactly. That bill would hand over credit lending enforcement
to the FMA instead of the ComCom. Would that make
a difference.

Speaker 2 (02:17):
It would. It also hands over the power to decide
watson and what's out for our credit protections to the
FMA instead of the minister. So we're not trying to
go to an MP and get their attention about little
bits and pieces that sneak through the loopholes. Instead, it'll
be with a regulator with the expertise to keep an
eye on things where they're getting out of hand and

(02:38):
where there needs to be someone to step in. So
hoping that all goes through and it eventuates in the
right decision. So once we go through the I.

Speaker 1 (02:45):
Made a mistake by actually casually using the word ban.
But what you would say is that you need to
say to have to pay that on a moral a
moral point, that this is possibly not good for those
people who are struggling to make Endsony, Yeah, it is.

Speaker 2 (03:01):
It is really a worry when someone puts that food on. Obviously,
in two weeks time, if they're in the same position,
they go to buy food again, they've now got to
get end no food money, so everything starts going backwards
and it all gets harder. And what we see is
people trying to keep these buying our pay late accounts
as a lifeline, and they just get deeper and deeper

(03:22):
in thet They end up paying for these instead of
other essentials, skipping meals to pay them, keep them open.
It just gets worse and worse. So financial mentors really worry.

Speaker 1 (03:30):
Jake, I thank you very much for your time. Jack Lily,
as the thin Cap senior policy advisor, he said, right
at the beginning, have you gone to after pay for
a reaction? Well, we've just got it, just got the
statement from after Pay. After Pay is evolving based on
customer feedback and strong merchant partnerships. The reintroduction of no
payment upfront for fuel and groceries gives customers greater flexibility

(03:50):
while maintaining our commitment to responsible lending. Using after pay
for every day spending is now mainstream, and by enabling
this feature through our trusted merchant network, we're meat seeing
customer demand with safeguards in place. And finally they say
they have no fees for those who pay on time,
offering a safe, interest free alternative to traditional credit cards,
who of course have high interest rates, helping consumers manage

(04:13):
every day spending responsibly. For more from Hither Duplessy Allen Drive.

Speaker 2 (04:17):
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Speaker 1 (04:19):
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