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More women are being drowned with BNPL debts after being coerced to acquire debt under their names.
Her partner forced Phoebe, a wife and a mother, to open a Buy Now, Pay Later account under her name. She is only relying on income support payments of $1,100 fortnightly. Afraid to have piled up debts, he would approach and confront her partner about the debt, yet she was physically abused in exchange.
“The minute I would say something, he’d turn aggressive,” Phoebe said.
A report from Good Shepherd, a charity providing support to abused and disadvantaged women and girls, states that the ease of opening an account in a BNPL scheme becomes an open door for financial abuse.
The number of women seeking help because of the said financial scheme has been quite alarming, accounting for almost half of the recent reports. And more than half of the victims said it had been more rampant a year ago.
The scenario worsens as it was recorded that 84% of the surveyed respondents said they have a series of different BNPL debt accounts. To make ends meet, they would open a new one to repay the previous account. Three-fourths of the clients said they should have complied with the actual payments.
“We hear stories from client services that they wish [the partner] could be stopped, that it wasn’t possible to open one after the other, that someone would say no,” Dr Ros Russell of Good Shepherd said.
Phoebe said that she does not have a good credit record since her partner, who is not a good payor, made her avail of credit cards as a young adult. Yet, despite her not having a clean credit history, the BNPL provider Zip granted her approval and even increased her credit limit from $1,000 to $2,500 after her partner coerced her into applying.
Afterpay, another BNPL company needs to conduct credit checks immediately to freeze a missed account.
Phoebe wrote to the companies describing her predicament after approaching Good Shepherd for help with her debt. All except one have now paid off their debts.
“We didn’t ask for it to be wiped, but they did,” she said.
According to the analysis, BNPL plans exploit financial fragility while covering holes in welfare support by augmenting inadequate benefits.
Several welfare clients reported using BNPL services to buy groceries, medication, and clothing. As the expense of living increased, this became increasingly common.
According to the research, income support payments and the avoiding family violence payment should be increased, and BNPL services should be more strictly regulated.
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