Riverina residents are urged to be wary of falling into a "debt trap" by using buy-now-pay-later programs to cover the cost of the Christmas season.
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The comments come after Treasurer Josh Frydenberg announced plans for stricter regulation of non-cash payment systems such as cryptocurrency and buy-now-pay-later services this week.
BPNL products are continuously coming onto the market and include Afterpay, Zip Pay, and the Commonwealth Bank's Step Pay.
They can be used for small purchases such as a pair of shoes to a night out at the pub to larger purchases, such as cosmetic surgery or solar panels for a house.
Wagga resident Jacob Smith first used Zip Money, owned by the same company as Zip Pay, to borrow $3000 for a camera. Three years later, and he is still paying that debt off.
"In the past eight months, it has hit me that I need to pay it back because the interest is eating away at my money," Mr Smith said.
"It is so easy to forget about that debt because they don't put any tight restrictions on it, like a certain date that you have to pay by.
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"So it's very easy to keep brushing it off. It's become a constant nuisance, and it's always in the back of your mind eating away at you."
Mr Smith has also Zip Pay and Afterpay to help cover the costs when needed.
However, while he said they could be good in an emergency, people should not use them unless they have a set payment plan. "The deeper hole you are in, the more you will keep spending with them," Mr Smith said.
"It becomes this infinite monthly bill that never ends so you have to have a hard budget for it."
Mr Smith said the process to access these schemes are too easy, and there should be regular checks on users to make sure their financial position is still viable.
"You can just add the card to your phone and tap away without realising," he said.
"While it is great for emergency purposes. It shouldn't be used for a spree."
A recent report released by Financial Counselling Australia revealed that in a recent survey of financial counsellors, 84 per cent said that about half, most or all clients presented with BNPL debt now.
This compared to just 31 per cent a year ago and 61 per cent said most or all their clients with BNPL debt are struggling to pay other living expenses.
James Hunt, campaigns lead for Financial Counselling Australia, said they are seeing people become overcommitted with BNPL schemes because it is so easy to access.
"We are now in the Christmas season and people will lean into these products and potentially find themselves in a financial hangover," he said.
"BNPL products have the potential to be a debt trap, and we describe them like quicksand - easy to get in to but hard to pull yourself out."
Mr Hunt said it is common for people to sign themselves up for multiple accounts, further compounding the financial burden.
He said some offer increased credit limits with no need for further approvals, a practice that is "concerning".
"Unsolicited increases in credit amounts by credit cards was banned by the government years ago but we are seeing that in BNPL," Mr Hunt said.
"It's an unregulated form of credit."
Mr Hunt said they are calling on the Australian Government to commission an independent inquiry into the industry.
"We need proper safeguards for these schemes," he said.
The reforms announced by the federal government earlier this week will progress in two phases, with urgent and immediately implementable reforms to be consulted on in the first half of next year and the remainder by the end of 2022.
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