Nine To Noon People still in trouble with Buy Now Pay Later services
Mar 4, 2026
Jake Lilley, Senior Policy Advisor at FinCAP, explains how buy-now-pay-later traps people with interest-free framing, late fees and limited affordability checks. He discusses why small debts spiral into larger unaffordable debt, gaps in current regulations, and how some withdraw KiwiSaver to cover payments. International moves toward stricter checks are also covered.
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Small BNPL Balances Can Become Expensive Quickly
- Buy-now-pay-later (BNPL) looks interest-free but late fees quickly escalate and trap people paying essentials like food or petrol.
- Jake Lilley notes defaults can be $10 on tiny balances and penalties can balloon $40 against a $4 loan.
Affordability Checks Are Missing For Many BNPL Loans
- Current law only partially covers BNPL and lets providers rely on limited credit-report checks instead of full affordability tests.
- Jake Lilley argues Australia and the UK are moving to require proportionate affordability assessments and New Zealand should follow.
Many Small BNPL Loans Create A Debt Treadmill
- BNPL often multiplies into many small loans, creating a debt treadmill that's hard to escape.
- Jake Lilley describes clients arriving with 20 to 30 BNPL loans forming part of a broader, unmanageable debt spread.