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Christmas shoppers are aware of the risks badociated with immediate purchase and subsequent payment as the spending season begins.
A new ASIC report revealed that buyers have accumulated more than $ 900 million in debt by buying now and paying later.
ASIC spokesman Michael Saadat said: buy now, pay later, proves extremely popular with consumers, but the temptation causes an increase in indebtedness.
"More than 60% of consumers who buy now, pay later, are between 18 and 34 years old and we found that two million consumers actually use the service, compared to 400,000 two years ago," he said. declared to Today.
Business regulators found that consumers made higher value purchases and spent more because of the possibility of spreading the cost over four bi-weekly refunds.
The option to buy now, pay later is also available for services as well as for retail purchases so that people take advantage of cosmetic and dental procedures as well as a whole range of other services.
Christmas 2018: Buyers are invited to spend big for this holiday season
However, the system is not regulated in the same way as the availability of credit cards and potential consumers are not controlled to know if they can make the bi-monthly repayments.
Forty percent of consumers earn less than $ 40,000 a year and they are the ones who take advantage of the immediate purchase option to pay later.
Students, part-time workers and young spenders can easily access the installed refund option and face unexpected charges for late repayments.
The government has recently put in place powers allowing ASIC to intervene with credit card issuing customers. Mr. Saadat said that they wanted these powers extended to cover the immediate purchase and subsequent payment of consumers.
These powers cover most financial products and services, but buy now, pay later, arrangements are not on the list.
© Nine Digital Pty Ltd 2018
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