United Kingdom: Call to ban alcohol sales using ‘buy now, pay later’ services such as Afterpay and ZipPay
By Melissa Davey
December 23, 2018
The sale of alcohol using “buy now, pay later” services such as Afterpay and ZipPay should be banned because they encourage alcohol dependence and unmanageable debt, a peak health organisation has said.
In its submission to the Senate inquiry examining credit and financial services targeted at Australians at risk of financial hardship, the Foundation for Alcohol Research and Education said the availability of alcohol at reduced upfront prices was concerning.
“Buy now, pay later services are not regulated under the national credit code, as no fees are charged for their services, no interest is charged on the debt/payment plans to the consumer and their loans are less than 62 days,” the submission states. “As a result of not being regulated by the code, there are no protections for the consumer such as responsible lending provisions.”
Some delayed payment services do not require consumers to pay anything on the date of online purchase but do require a minimum monthly repayment, while others require consumers to pay 25% of the cost at the time of purchase, with further repayments automatically deducted every week.
“This enables people to make purchases that they cannot afford at the time, or potentially will not be able to afford in the future,” the submission says. “This is concerning in regards to consumables, as these items will have been at least partially consumed before payment is due. It is particularly concerning when extended to addictive substances such as alcohol.”
The chief executive of Fare, Michael Thorn, said the payment services were of particular concern for vulnerable groups, including dependent drinkers and underage drinkers.
“Alcohol is no ordinary commodity because of the health and social harm caused, which costs the Australian governments almost $11bn per annum,” he said.
“Alcohol is a psychoactive drug and a group 1 carcinogen, which makes it one of the leading contributors to death and disability, and is a causal factor in over 200 disease and injury conditions.”
The Fare submission also calls on the government to prohibit the advertising and sale of alcohol with fractional costing; regulate the sale and advertisement of alcohol online to ensure that it abides by responsible service of alcohol provisions in all states; and to conduct a public inquiry into the online sale, advertisement and delivery of alcohol.
An associate professor of Indigenous health at RMIT university, Aunty Kerrie Doyle, said many vulnerable Indigenous people in remote communities were unlikely to have a credit card, making buy now pay later services requiring no credit card to sign up particularly dangerous.
“I’d agree with Fare on banning the pay later services for alcohol, not just for vulnerable communities but for everyone,” she said. “Where you have increased hopelessness, you have increased alcohol intake.”