Part A – Introduction and Background

This Code of Practice was developed by Australian Finance Industry Association Limited ACN 000 493 907 (AFIA) (the Code) to enable the Buy Now Pay Later (BNPL) industry to take a proactive approach to increasing consumer protections and go beyond current regulatory obligations for BNPL Products or Services. The Code has been developed in close consultation with key stakeholders including consumer groups, government, regulators and companies in the BNPL Industry.

This Code commenced on 1 March 2021 and will be reviewed in accordance with clause 7.

1. Objectives of this Code

1.1 This Code has been voluntarily developed and is intended to assist Code Compliant Members of the AFIA BNPL Providers Group to:

a. Promote a customer-centric approach to the design, marketing and distribution of a BNPL Product or Service;

b. Promote high industry standards of service for customers and build best practices across the BNPL Industry; and

c. Support compliance with legal and industry obligations.

2. Who is bound by this Code?

2.1 This Code is binding on Code Compliant Members of the AFIA BNPL Providers Group when they provide BNPL Products or Services (the particular circumstances in which the Code will apply are set out in the balance of this Part A).

2.2 A list of Code Compliant Members, and details of when they became (and, where applicable, ceased to be) Code Compliant Members, can be found on the AFIA website.

2.3 Code Compliant Members are subject to the oversight of the Code Compliance Committee (CCC).

2.4 All Members of the AFIA BNPL Providers Group must at all times comply with the terms and conditions of the AFIA Constitution including clause 6.3.

3. Reading this Code

3.1 Commitments in this Code reflect the broad nature of BNPL Products or Services and of Code Compliant Members and their Merchant and Retail Partners.

3.2 The commitments represent the proposed standards that the AFIA BNPL Providers Group will meet in the provision of BNPL Products or Services.

3.3 This Code is drafted to be an important set of standards, reflecting the nature of the BNPL Industry and our commitments to our customers.

3.4 The commitments in this Code are intended to be best practice and we will monitor domestic and international developments to ensure they remain best practice.

3.5 We will consider developments in technology, data, comprehensive credit reporting and open banking as a means of undertaking a process of continuous improvement and developing a more holistic view of our customers.

3.6 In this Code, the words ‘you’ and ‘your’ refer to an individual who is or was our customer or, where relevant, an individual who is a future customer.

3.7 In this Code, the words ‘we’, ‘us’ and ‘our’ are to be read as referring to a relevant Code Compliant Member that is bound by this Code and that has agreed with you that it will comply with this Code.

3.8 Some words or phrases used in this Code have special meaning and are identified by the use of capital letters, such as in the case of 'BNPL'. Many of these words and phrases are defined in clause 18 of Part D of this Code.

4. Application of this Code to BNPL Products or Services provided by Code Compliant Members

4.1 This Code is applicable to BNPL Products or Services provided by us when we are or were a Code Compliant Member at the time that the relevant BNPL Product or Service was provided.

4.2 For BNPL Products or Services provided by us prior to the date we became a Code Compliant Member, this Code will apply to our future dealings with you in the manner set out in clause 5 below.

5. When does this Code apply to you?

5.1 Where you are a customer, this Code applies to the interactions and arrangements we have with you in relation to a BNPL Product or Service provided on or after the date that we became a Code Compliant Member.

5.2 Even when we cease to be a Code Compliant Member, where this Code applied to us in respect of your BNPL Product or Service, we will continue to be bound by this Code for that BNPL Product or Service.

6. Legal status of this Code

6.1 This Code describes contractually enforceable commitments made by Code Compliant Members.

6.2 These commitments are enforceable by customers through AFCA.

6.3 This Code operates alongside, and is subject to, existing laws and regulations and does not limit your rights under such laws and regulations.

6.4 This Code imposes standards on Code Compliant Members that are above those required by the law or regulation and, where it does so, the commitment of Code Compliant Members is to the higher standards of the Code.

7. Review of the Code

7.1 This Code will be fully reviewed (Full Review) on a regular basis, but no later than two years after the commencement of the Code. The Code will then be reviewed at least every three years from the previous review to ensure that it continues to promote high industry standards of service for customers and builds best practices across the BNPL Industry.

7.2 A Full Review of the Code will include open and wide public consultation and the AFIA Board may appoint an independent person or panel to conduct the review.

7.3 The AFIA Board may review the Code outside of a Full Review process, after consultation with, and seeking comments and suggestions from:

a. The members of the CCC;

b. Code Compliant Members;

c. Consumer advocates; and

d. Such other organisations (for example, regulators) or people it considers appropriate.

7.4 For significant changes to the Code, outside of a Full Review process, in addition to clause 7.1 and 7.3, the AFIA Board will also undertake a public consultation process.