Financial Rights Legal Centre
Call the National Debt Helpline
on 1800 007 007.
Buy now, pay later services (including Afterpay, Certegy, zipMoney, zipPay, Openpay)

This fact sheet is for information only. It is recommended that you get legal advice about your situation.


Ursula used a ‘buy now, pay later’ (BNPL) service to buy several items before Christmas, while she was on Centrelink payments. Soon she was struggling to meet the payments.

Ursula thought the BNPL service had a system where it assessed what she could afford: she had used it once before when there was a limit on how much she could spend. After Christmas Ursula saw she owed $550 from several different retailers after using BNPL and had already missed two or three $20 payments from some retailers, and some $50 payments from others. She thought some late fees were added but was not sure.

The BNPL service then locked Ursula out of her account, so she was unable to check what was owed. Ursula’s only form of income was Centrelink, she was already paying back a $400 loan to Centrelink, and she and her partner both had other loans and bills. When she applied for hardship through the BNPL service she was told they would charge no further late fees and that her account would be put on hold.

Ursula’s BNPL debt was passed to debt collectors, who continued to add fees to the original amount owed. The debt collectors eventually told her she owed $1,323.42. This was much more than the initial purchase amount, and included significant late fees, added after Ursula was assured that there would be no more late fees.


Buy now, pay later (BNPL) services allow you to purchase goods by paying off the price of the goods in instalments. There are a number of BNPL services in the market, for example, Afterpay, Certegy, and Zip Pay. They are different to credit cards and other loans because they do not charge interest or fees. Because of this, they do not have to follow the same laws as companies who provide other forms of credit. The bottom line with BNPL services, is that anything that sounds ‘too good to be true’ needs to treated with plenty of caution.

BNPL services market themselves as a quick and easy way to get what you want now, and pay them off later, in instalments (a bit like lay-by but you get the goods right now). BNPL services look appealing to people because they claim there is zero interest payable. Instead, BNPL services may charge the vendor a fee for using their service and/or charge a late fee if you don’t pay your instalments on time. Using a BNPL service can be cheaper than a credit card or other form of credit. It might also be available to people who can’t access to other forms of credit.


  • Can I really afford this item? Do I really need it?
  • What other debts do I already have?
  • Does the BNPL repayment date line up with my payday? Do I expect to pay on time?
  • Are there hidden costs?
  • What happens to my personal information (data)?
  • What if I return the goods?
  • What if I want to complain?
  • The numerous pitfalls, including:


Most financial service providers are required to assess if you can pay for a loan under the National Consumer Credit Protection (NCCP) Act 2009. The lenders have to be responsible and should not set you up to fail.

BNPL services are not regulated under the NCCP Act and are not legally required to check if you can afford the repayments. This means you need to do this yourself. Make sure you will have enough money left on each pay day to meet this instalment plus all your other commitments. If you have other debts, make sure this won’t be the straw that broke the camel’s back.

You should also consider how badly you need or want the goods. Are you just spending money you don’t really have because the BNPL option is available? Sometimes you feel you absolutely must have something but you don’t have the cash and you leave the shop empty-handed and depressed. A week later when you have enough money to pay for the item, you realise you didn’t really need it and you have other priorities. Try a ‘circuit breaker’ before you commit to an impulse purchase, like going for a walk first, or better still, come back the next day or the next weekend if you still really want it.


With few checks conducted by the BNPL service, it is easy to fall into a debt trap if you don’t have the money to pay the next instalment. People often default when the payment instalment date is due just before payday and they have no money left in their account. You will then incur other charges like late fees charged by the BNPL service and dishonour fees charged by your bank. This can have a ‘domino effect’, making it harder to pay your other debts. This is how a debt spiral takes hold.

Some people also manage to ‘game’ the system and have multiple BNPL accounts. This can really get you into difficulty. Also, paying your instalments with your credit card instead of a debit/savings account, means you will incur interest and charges, and may accumulate problem debt.

Defaulting on BNPL services may affect your credit rating. Many BNPL schemes include in their contracts that if you default on payments they can list a default on your credit file , which can make it difficult to get credit from other lenders.

Unexpected things happen: you might lose your job, get sick, or your car could break down. Other lenders are required by law to help by varying your credit contract if you are in hardship, including letting you miss a payment, or pay less without penalty. BNPL services don’t need to offer hardship arrangements so they might continue to charge late fees, or send your account to a debt collector even if you’ve asked for more time for a good reason.


Vendors who are charged fees for BNPL services add that to their overhead expenses (like rent, electricity or supply costs) and these increases the prices of what they sell. This means that all customers are probably paying the costs of making BNPL services available, whether or not they are using them.

In some cases the costs of the actual goods purchased by BNPL are clearly inflated. Always make sure you enquire about the cash price of any goods before agreeing to any BNPL arrangement. Check with other retailers to make sure you are not actually paying interest hidden in the costs of the goods.


Personal information (like your name, date of birth, contact number etc.) you give to BNPL services is stored with them, along with a record of your purchases, and is very valuable to other businesses and for the BNPL service’s own marketing. BNPL services might be entitled to sell your personal information to other businesses, and to market directly to you, under the terms of use you sign to use the service.

Consumers who have spoken with us report getting a lot of spam and phone calls from other businesses right after they sign up with BNPL services.


If you return the goods, either because they are faulty or because you have changed your mind, the trader should process the return to the BNPL service. You may find yourself caught in the middle if this does not happen and the BNPL continues to pursue you for instalments to pay for goods you no longer have.



If you have a problem with the service, complain directly to the company. If this does not work, you may have other options. BNPL services are not required to be members of the Australian Financial Complaints Authority (AFCA), although some of them may have joined voluntarily. You can find out if they are a member by using the Find a Financial Firm search function on the AFCA website. If they are a member you can lodge a complaint online for free.

If the service is not a member of AFCA, you can complain to the Australian Securities and Investments Commission (, or for problems involving faulty or returned goods, talk to NSW Fair Trading (


If you are having difficulty meeting your instalment payments, you can get advice from a free financial counsellor by calling the National Debt Helpline on 1800 007 007.




Is the BNPL service a member of AFCA?

What does the BNPL service’s privacy policy say?

How sure are you that you will be able to make the payments required?

How much are the fees if you miss repayments?

When are the payments deducted from your account? Line up your purchases with your pay day.

Are you being charged extra for the goods, shop around and check there are no hidden fees and charges built into the price?