Warn­ing on debt surge by After­pay

Sunday Mail - - NEWS - MATT SMITH

CON­SUMERS are be­ing warned not get them­selves in over their heads with a new pay­ment plan sys­tem.

After­pay, a sys­tem that al­lows con­sumers, more than one mil­lion in Aus­tralia, to buy and re­ceive goods and pay them off in eight equal pay­ments has ex­ploded in pop­u­lar­ity. There are 7200 re­tail­ers on the After­pay plat­form in­clud­ing Jet­star, Myer, Of­fice­works, and Toys’R’Us. The com­pany has spruiked it­self as a modern layby sys­tem and a cham­pion of re­spon­si­ble spend­ing.

But South Aus­tralia’s largest wel­fare lobby has warned con­sumers not to spend money they don’t have. SA Coun­cil of So­cial Ser­vices chief ex­ec­u­tive Ross Womer­s­ley said: “It is just an­other means to get peo­ple ac­cess to credit when they may not have the means to find the money.”

“It is an­other way of spend­ing money that you do not have. Aus­tralian house­holds have the high­est debts that they have ever had and this process in­vites you to take on an­other debt,” he said.

But Ste­fanie Menezes, of con­sumer ad­vo­cate group Choice, said After­pay was bet­ter than some other op­tions. “After­pay is a prefer­able ser­vice to pay­day loans be­cause no in­ter­est is charged,” she said. “This means you could pay off a $100 pair of jeans over eight weeks with­out pay­ing any­thing ex­tra. There are strict fees, how­ever, for miss­ing a re­pay­ment.”

After­Pay’s web­site shows cus­tomers can be charged $10 each time in­stal­ments are not hon­oured and $7 seven days af­ter the pay­ment is due if it is still un­paid. After­pay ex­ec­u­tive di­rec­tor David Han­cock said After­pay used com­pre­hen­sive re­pay­ment as­sess­ment tech­nol­ogy at the time of pur­chase. “Re­tail­ers on the After­pay plat­form pro­vide a limit per trans­ac­tion and av­er­age or­ders around $150-$200, which is re­ally aimed at pro­vid­ing cus­tomers a bud­get­ing tool to spread out pay­ments,” he said.

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