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Buy now pay later schemes leaving young Kiwis ‘over-indebted’ – academic



New research by the Auckland University of Technology shows young adults are taking on dangerous amounts of debt through buy now pay later (BNPL) schemes like Afterpay and Laybuy.

Co-author and senior lecturer in finance Ayesha Scott said the survey of 705 young adults aged 18 to 34 indicated thousands more could be in serious debt.

“Over 190,000 young Kiwis are likely to be either over-indebted or at severe risk of it,” she said.

“Buy now pay later had a really strong link to increased over-indebtedness, above and beyond other debts.”

Services like Afterpay let customers buy products in smaller instalments over several weeks, but one in five survey respondents did not view this arrangement as debt.

debt generic

Photo: 123RF

“Up until very recently, BNPL escaped regulation,” Scott said.

“This is because our definition of debt is quite specific: it needs to be more than eight weeks and have an interest rate attached.”

Most providers did not fit this definition because they limited the repayment period to six weeks and did not charge interest.

“Due to this loophole in our technical definition of debt, BNPL providers were able to market themselves as not debt, and this messaging and slick marketing has really cut through,” she said.

“If it looks like debt, it’s probably debt. But due to a technicality, these providers have been able to market themselves as being different.”

Almost 70 percent of the survey respondents had used BNPL at least once.

And 20 percent were using it “poorly” by incurring frequent late fees, prioritising repayments over daily expenses, or by borrowing from other providers to repay their debts.

But from September 2024, BNPL providers will be required to perform credit checks on their customers.

Scott said that did not go far enough.

“I think there should be affordability checks,” she said. “There absolutely needs to be more oversight and more in-depth regulation that goes beyond what’s already been announced.”

She said the convenience of BNPL services was not worth the damage it caused to 20 percent of young users.

“We’re really promoting and enabling what is a convenient tool at the direct expense of 190,000 young New Zealanders,” she said.

“Those who are using it poorly and are getting into trouble with it, they’re why those protections are needed.”

She said it was important to raise awareness about the darker side of BNPL services.

“What we really want to do is make sure consumers are aware of the pitfalls with these products,” she said.

Laybuy managing director Gary Rohloff said the service aimed to mitigate those pitfalls.

“We strongly believe that BNPL should be offered and used responsibly,” he said.

“It’s for this reason we have always conducted credit checks on customers, meaning Laybuy isn’t available to everyone.”

He said Laybuy was not offered on daily expenses like grocery, fuel and bills.

“We welcome the government’s pledge to introduce appropriate regulation for the sector and think it’s important we raise standards across the industry,” Rohloff said.

A spokesperson for Afterpay questioned the credibility of AUT’s survey.

“Surveying 705 young adults aged is neither nationally representative nor reflective of the way Afterpay is used, more broadly according to Afterpay data,” they said.

They pointed to an August Cabinet paper by the Ministry of Business, Innovation and Employment (MBIE) that noted it was “difficult to demonstrate a clear relationship between BNPL and financial hardship as no substantial quantitative data exists due to the relative newness of the sector and difficulty in assigning causation”.

The spokesperson said 98 percent of purchases through Afterpay did not incur late fees, and 95 percent were paid on time.

Duncan Webb

Commerce and Consumer Affairs Minister Duncan Webb. Photo: RNZ / Samuel Rillstone

Commerce and Consumer Affairs Minister Duncan Webb said BNPL services would be exempt from affordability assessments because they were different from other forms of lending.

“Buy now pay later schemes are interest-free contracts for relatively small amounts of money,” he said.

“They are relatively low-risk, and requiring a full affordability assessment would be disproportionate and could see access to this useful form of cheap credit withdrawn.”

But Webb did not rule out further regulations in the future. “If there is evidence that these measures are not working, further regulation will be considered,” he said.



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Christchurch terror attack inquest: ‘Significant blind spot’ relating to St John’s specialist paramedics – coroner



A woman who was forced to leave the side of her bleeding husband following the terror attack at Christchurch’s Linwood Islamic Centre only discovered he had died the following day after seeking help from then-prime minister Jacinda Ardern.

Saira Patel’s husband Musa Patel was one of seven people who died after being shot at the Linwood Islamic Centre, following the massacre at nearby Al Noor Mosque on 15 March 2019.

Supported by her son, Patel told the inquest into the deaths that she and her husband were praying in separate parts of the mosque on the day of the attack.

Patel said she thought a tyre had blown when she heard a loud bang. A baby began to cry, and she could soon smell gunpowder.

She yelled, “Someone is shooting, someone is shooting” as people ran to escape.

When Patel found her bleeding husband, she told the Coroners Court she could hear him saying his “last prayer” as if he knew he was about to die.

Imam Hafiz Musa Patel

Musa Patel died at Linwood Islamic Centre on 15 March 2019. Photo: Facebook/ US Embassy Suva

She said she was forced to leave when police arrived and started treating Musa Patel, an order that distressed her to this day.

“I think any dying person who is about to leave this world would be very desperately craving and needing to be close to their loved ones. My presence during his final moments would have made a big difference in my life and I think maybe his last moments of departing this world,” she said.

She did not know her husband had died until the following day, when she approached then-prime minister Jacinda Ardern, who led her to a counsellor.

Patel said the counsellor showed her a photo of an unidentified man in hospital who was not her husband.

“I knew then that my husband was dead. There was no-one else who could have identified him, and this last unidentified man was my last hope,” she said.

Patel thanked the doctors and paramedics who did everything they could to console her husband in his final moments.

“I would like to thank them from the bottom of my heart,” she said.

“I was trying to be with him in that last moment but maybe they were chosen to be with him.”

Dr Alison Wooding from nearby Piki Te Ora Medical Centre was one of the doctors who treated Musa Patel when staff went to the mosque to help the injured.

She told the court he was meant to be the first victim taken to hospital but realised he had died after he was moved onto a stretcher.

Wooding said she and others were talking to Musa Patel the entire time they cared for him, but she did not recall him ever responding.

Police officers gave evidence on Tuesday saying Musa Patel had been able to communicate with them at first but his condition deteriorated over time.

Wooding told the court she felt apprehensive and worried about the situation at the mosque, but safe and protected between armed and vigilant police officers.

29th November 2023 Iain McGregor/The Press/Pool Christchurch Masjidain Attack Coronial hearing. Coroner Brigitte Windley.

Deputy chief coroner Brigitte Windley. Photo: The Press / Iain McGregor

‘Significant blind spot’ relating to St John emergency response team – coroner

The coroner has queried a “significant blind spot” in the way St John ambulance officers work with specialist paramedics trained to work in dangerous situations.

Deputy chief coroner Brigitte Windley questioned St John duty manager Bruce Chubb about the organisation’s response massacre.

Two Special Emergency Response Team (SERT) paramedics were among ambulance officers who went to the scene of the shooting in Linwood Avenue.

No-one from St John attended the Al Noor scene in a SERT capacity.

Chubb told the Coroners Court that SERT teams worked under police and it was not uncommon for St John not to know when they had been requested, where they were, or what they were doing.

In response, coroner Windley said: “My concern is that that creates a significant blind spot for St John, doesn’t it?”

“Isn’t it that these are critical resources in terms of closing that care gap for people who are dying and injured and being able to get a response in, and you’ve got no visibility about where they are and even if in fact they’ve been deployed?”

041223 CHRIS SKELTON Witness, Bruce Chubb from St John command and control during the Christchurch terror attack inquest held at the Christchurch Justice precinct.

St John’s Bruce Chubb. Photo: Stuff / Chris Skelton

Chubb said he was not suggesting it was “okay” that St John did not know where SERT officers were but said it was the practice at the time.

He was not aware of any changes to the SERT policy since the terror attack.

Chubb told the coroner he thought it was “always nice to know” where resources were, to which she replied, “I would suggest it’s more than nice to know. I would suggest that St John needs to know”.

Chubb earlier told the inquest that he believed general ambulance officers should not have entered either mosque immediately after the shootings because of the safety risk.

Windley said the court was concerned St John ambulance officers had to breach the organisation’s policy in order to get an emergency response in place.

“Do you agree that that’s fundamentally a problem?” she asked.

“Yes,” Chubb replied.

Earlier on Tuesday, Chubb told counsel for families Kathryn Dalziel that the terror attack was a catastrophic event that he did not expect and was never prepared for.

“I don’t believe any of my colleagues were either, so it was fundamentally overwhelming,” he said.

The inquest will examine the following 10 issues over seven weeks:

  • Events of 15 March 2019 from the commencement of the attack until the terrorist’s formal interview by police
  • Response times and entry processes of police and ambulance officers at each mosque
  • Triage and medical response at each mosque
  • The steps that were taken to apprehend the offender
  • The role of, and processes undertaken by, Christchurch Hospital in responding to the attack
  • Coordination between emergency services and first responders
  • Whether the terrorist had any direct assistance from any other person on 15 March 2019
  • If raised by immediate family, and to the extent it can be ascertained, the final movements and time of death for each of the deceased
  • The cause of death for each of the victims and whether any deaths could have been avoided
  • Whether Al Noor Mosque emergency exit door in the southeast corner of the main prayer room failed to function during the attack and, if so, why?

The inquest continues.


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Protests raise questions about next year’s Waitangi day



In the wake of protests over the new government’s policies on co-governance and the Treaty, the head of the Waitangi National Trust Board says it is important Treaty partners front up and have a conversation on 6 February.

Prime Minister Christopher Luxon says he intends to visit for Waitangi Day, as does ACT’s David Seymour.

The protests taking place across New Zealand on Tuesday were part of a “National Māori Action Day”, led by Te Pāti Māori and iwi, to challenge the government over its policies on the Treaty of Waitangi, and other policies affecting Māori.

Waitangi National Trust Board chairperson Pita Tipene expected for that sentiment to flow through on Waitangi Day.

“Clearly, the Māori people see it as an attack on the Treaty of Waitangi and the constitutional basis of this country,” Tipene said.

These include switching from Māori to English names on various government departments, rewriting legislation to make mentions of the principles of the Treaty more specific, and progressing an ACT bill calling for the principles to be set down under its own prescription, rather than decades of jurisprudence.


Ngāti Hine leader Pita Tipene

Ngāti Hine leader Pita Tipene Photo: RNZ

Tipene told Checkpoint there was no invite list for politicians per se, and the doors of the Trust were open for all to come along.

“Given that it is a Waitangi Day commemorations period, it’s really important that the Treaty of Waitangi is the focus, and therefore the Treaty partners should front up and have a conversation.”

He would be disappointed, but not surprised, if parties in government were not represented there on the day.

“It has happened before where governments or political parties have chosen not to front up at Waitangi.”


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Te Pāti Māori protests – Day of action focuses on new government’s Māori policies



Police says protesters are causing widespread delays at key transport networks around the North Island, but there have been no arrests so far.

A police spokesperson says commuters should allow travel time this morning, with Te Pāti Māori’s planned protests disrupting travel routes.

There are large gatherings in Tāmaki Makaurau and central Wellington, along with a number of other cities and towns.

The spokesperson says Auckland motorists are advised there are heavy delays on parts of the motorway network this morning.

The demonstrations are in response to Te Pāti Māori’s call for action against the new government’s policies on co-governance and the Treaty.


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