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ASIC has published a new regulatory guide to help buy now pay later providers understand their obligations, ahead of new laws coming into effect on 10 June 2025.
Regulatory Guide 281 Low cost credit contracts (RG 281) provides information to assist low cost credit contract providers to comply with their key obligations, including modified responsible lending obligations.
ASIC Commissioner Alan Kirkland said: ‘These reforms are an important step to improve protection for Australian consumers who use buy now pay later products.’
Following the release of ASIC’s draft regulatory guide and Consultation Paper 382 Low cost credit contracts (CP 382) in February, ASIC received 16 submissions from stakeholders, including buy now pay later providers, industry associations and consumer advocates. ASIC clarified parts of the guide and added examples in response to feedback.
‘We strongly encourage buy now pay later providers who do not already have the appropriate credit licence to apply for one as soon as possible,’ Kirkland said.
‘Providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate.’
Background
The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 amends the National Consumer Credit Protection Act 2009 (National Credit Act) to extend the National Credit Code (which is Schedule 1 to the National Credit Act) to buy now pay later contracts.
Under the new regime, some obligations will differ for buy now pay later contracts that meet the definition of a low cost credit contract. For example, providers of low cost credit contracts will be able to elect to comply with modified responsible lending obligations.
In January 2025, ASIC released Information Sheet 285 Buy now pay later credit contracts: Credit licensing (INFO 285), which explains the licensing requirements that apply to anyone engaging in credit activities involving buy now pay later contracts.
More information
- Regulatory Guide 281 Low cost credit contracts
- Summary of feedback to CP 382 Low cost credit contracts
- Consultation Paper 382 Low cost credit contracts (and non-confidential submissions)
- ASIC invites feedback on buy now pay later regulatory guidance (7 February 2025)
- ASIC alerts buy now pay later providers to apply for a licence under new laws (17 January 2025)
