The New Zealand government has decided to exempt fintech buy now pay later (BNPL) service providers from the default fee provisions outlined in the Credit Contracts and Consumer Finance Act (CCCFA). This exemption, part of Commerce and Consumer Affairs Minister Andrew Bayly's financial services reforms, has raised concerns regarding consumer protection. Bayly argued that the CCCFA's default fee provisions, designed for traditional credit products, could threaten the viability of BNPL businesses by limiting how they charge default fees. Currently, only three BNPL companies operate in New Zealand: Afterpay, Klarna, and Zip. While the Ministry of Business, Innovation and Employment (MBIE) suggested conditional exemptions to protect consumers from excessive fees, the Cabinet opted for an unconditional exemption. Critics argue this decision could lead to increased default fees and inadequate consumer safeguards, potentially limiting access to affordable short-term credit options.
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