Alana is only 18, but she is already thousands of dollars in debt.
In the past year, she joined up to about seven different buy now, pay later (BNPL) companies and owes more than $8,000.
"It was so easy to sign up. They just asked for my name, date of birth and ID," said Alana, who did not want to use her surname.
"They kept charging me different hidden fees I had no idea about.
"I was in a very bad domestic violence situation. I had a job at the time and then I ended up having to leave that job because the partner I was with said 'no you're not going to work'.
"He controlled all my money. I resulted in using Afterpay to put food on the table for myself."
She has now moved states and is receiving Youth Allowance payments.
After paying her rent, her phone bill and buying food, she has no money left over.
With no ability to pay the debt back, debt collectors harass her frequently.
Consumer groups and charities join forces
Alana's situation is not uncommon.
The buy now, pay later industry has become mainstream, with more than 6 million customer accounts in Australia alone, and over half of the users are under the age of 40.
Providers can offer loans of up to $30,000, but these products are not covered by the National Credit Code and can bypass basic consumer protections — like assessing someone's ability to repay the loans or having hardship processes in place.
But consumer groups want to change all that.
More than 100 charities and consumer groups (including Financial Counselling Australia, Choice and Anglicare Australia) have signed an open letter calling on the next Parliament to urgently legislate for greater consumer protections to prevent financial harm.
As a first step, they would like to see an independent inquiry to inform new regulatory protections.
Financial Counselling Australia's Fiona Guthrie says she is seeing increasing numbers of people becoming financially overcommitted, especially as living costs increase.
"We're seeing people come in with multiple debts from different providers and it's being used for essential living," she said.
"Some providers even encourage that — how responsible is that?"
Service 'already regulated' says government, industry
A spokesperson for Financial Services Minister Jane Hume said "buy now, pay later arrangements are already regulated through the Australian Securities and Investments Commission's (ASIC) Product Intervention Power, and the Design and Distribution Obligations, which came into effect on 5 October 2021."
The Labor spokesperson for financial services, Stephen Jones told the ABC, "BNLP provides competition and innovation in our consumer credit market. This is a good thing. It needs to be appropriately regulated."
"We welcome the industry's move to introduce a voluntary code. We will assess its operation and look to legislate, where necessary, on the basis of the code and any identified gap," he said.
The chief executive of the Australian Finance Industry Association Diane Tate said "the consumer protections that consumer groups are calling for are already in AFIA's BNPL Code of Practice, which goes above and beyond the law.
"AFIA's BNPL Code covers over 95 per cent of the BNPL market, and AFIA implores Australian consumers to use a BNPL provider that is a signatory to the code."
Alana is receiving help from financial counsellors at the National Debt Helpline.
"I just feel like a lot of weight's been lifted off my shoulders. There's somebody there willing to help, reassuring me everything is going to be fine," she said.
They have assisted her to get a moratorium on repayments for some of her accounts for several months.
And her advice to anyone thinking of taking out a buy now, pay later debt?
"Don't do it."
