Buy Now Pay Later – ASIC enforcement action

ASIC took action against Buy Now Pay Later (BNPL) provider Elevare Pay Easy Pty Ltd, trading as Elepay, for distributing seven credit products to consumers without a Target Market Determination (TMD) between 5 October 2021 and 15 March 2023. ASIC was concerned about Elepay's failure to make a TMD, which exposed consumers to the risk of obtaining a financial product that was not appropriate for their needs and objectives. During this period, Elepay lent $13.748 million to 1,658 retail clients.

Key takeaways

1. The TMD must appropriately define the target market for the BNPL product. The target market is the class of retail clients or consumers who share specific characteristics and are deemed to be the "ideal" consumer for the product. The TMD must specify these characteristics and the conditions for distributing the product to "ideal" consumers.