SYDNEY (Reuters) – Identity theft complaints in Australia involving buy-now-pay-later finance doubled to a record last year, data seen by Reuters showed, raising calls for authorities to rein in the booming market.
Australia is a global pioneer in buy-now-pay-later (BNPL) retail financing and home to several top providers, including Afterpay Ltd, which have enjoyed hot growth in transactions, elevated valuations and loose regulation.
A sharp spike in fraud complaints, however, has raised questions about the soft oversight, which some analysts see as a key sector risk amid increasing advocate calls for greater consumer protections in the $4.3 billion market.
IDCare, a not-for-profit consumer support organisation, experienced a record 1,600 incident reports related to BNPL products in Australia last year, double the year before, data it prepared for Reuters showed.
While credit card fraud complaints were four times that amount, the pace of increase in BNPL fraud represents an outsize showing for the startup financing alternative.
“What it really shows you is how quickly the criminals adapt to the market for fraud and abuse the system,” said Moises Sanabria, acting managing director of IDCare.
IDCare is funded by various public and private sector institutions and acts as the main support service for identity theft victims in Australia.