Power in Partnerships: Scaling the Consumer Voice in Policy
Evermore complex digital finance systems, professional malpractice, personal data misuse, poor service provision – in today's tech-driven finance world consumers are increasingly exposed to digital misdeeds, unfair practices and unmet needs.
However, as well as being impacted by the problem, consumers and their advocates form an integral part of efforts to effect a solution. Consumer advocates can play an essential role in resolving both national and international consumer rights issues by working as strong partners to regulators, raising awareness of emerging issues and proposing constructive solutions.
Success stories from Rwanda to Brazil, India to Mexico, illustrate how consumer advocates have helped policymakers implement positive regulatory improvements. Through Consumers International’s global network, advocate groups in different countries can reach beyond national boundaries, consult on global challenges, learn from each other and join forces to address global concerns.
THE BUY-NOW-PAY-LATER CHALLENGE
The rapid global emergence of Buy Now Pay Later (BNPL) financing models is a good example of how Consumers International Members in different geographies collaborated to help policymakers regulate a sector causing consumers financial harm.
BNPL is a type of installment loan that typically allows consumers to purchase something immediately, with little or no initial payment, and to pay off the balance over four or fewer payments. An intermediary company offering a BNPL service buys a product on behalf of a consumer, who pays back that intermediary over an agreed time period – typically just a few weeks.
BNPL loans offer consumers and small businesses an alternative means of financing certain purchases, in place of cash or credit. Unlike credit cards or many other traditional forms of consumer credit these loans do not usually require a credit check. And instead of consumers proactively making repayments, BNPL firms typically debit money directly from their account.
At first glance this loan structure looks convenient, easy and inexpensive, and for many users it is. BNPL loans are generally less predatory than payday loans, which come with high interest rates. However, in many ways the new model is similar to other types of consumer debt, where late fees and penalty interest can be applied, and loans can be sold to a third-party collection agency.
As BNPL finance emerged, a legal loophole meant these loans were not classified as credit products in some jurisdictions as they often do not charge interest for an initial period. In countries including the UK and Australia, BNPL firms avoided the heavy regulation typically associated with most loan types.
Lenders were not required to conduct financial controls to assess whether consumers could afford repayments. They imposed costly late-payment fees that were not always transparently disclosed and could rapidly build up over time, while providing inadequate or no redress processes.
RAISING THE CONSUMER VOICE
In 2020 the number of people in the UK taking out BNPL loans tripled as the pandemic boosted online sales, according to the UK government.
The sector’s exponential growth and its potential pitfalls led UK consumer group Which? to conduct a study, published in 2021. Results showed a third of the UK population had used BNPL loans, with many unaware the sector was unregulated.
Alongside a media campaign raising awareness about the sector’s lack of regulation, Which? held regular consultations with regulators to highlight concerns relating to BNPL. A further study, several years of consultation with the industry regulator and a new UK government followed.
“It is absolutely essential that policymakers hear arguments and positions from everyone, not just industry, and that these are well informed, well researched and backed up by evidence rather than hearsay,” said Paddy Greene, Head of Money Policy at Which?.
“Consumer advocates help get the balance of legislation and regulation right and ensure that the interests of consumers are met. We don't always succeed, but without us there would be far less protection,” he said.
Which? were not alone in their BNPL reform efforts as throughout the campaign, they were in discussions with advocacy groups in other countries, including CHOICE in Australia. Many of the issues experienced by BNPL users around the world were the same.
A CHOICE survey found that within a single year 30% of people in Australia used BNPL services, with one in five users taking loans to pay for essential goods, such as food, groceries or utility bills. Of those users, 15% reported missed or late payments, with high charges leading to financial hardship for most of this group.
COLLECTIVE AND EFFECTIVE
As BNPL problems mounted, Consumers International realised the full scale of the challenge and brought together a large group of its Members to unite and tackle common pain points.
Joining forces helped Consumers International Members in a number of ways: raising awareness of emerging BNPL risks globally; supporting and championing the work of individual members and facilitating cooperation between their campaigns; and putting forward a unified solution grounded in consumer evidence that could be applied across international borders.
Which? was one of 11 signatories from 9 countries to Consumers International’s Fair Digital Finance joint statement calling for effective global regulation of BNPL products, which helped Members make six key policy asks to protect consumers.
“The statement helped us reform or restructure how we put forward our asks to regulators. We started to see the consultation process stalling and the statement helped reignite things and show that BNPL was a global problem, not just a UK issue,” said Greene, one of the advocates that helped draft the statement.
The statement also proved a powerful tool in Australia. In addition to media coverage, CHOICE asked supporters to sign the joint statement to highlight growing public calls for reform to BNPL. This helped show that consumer advocates were part of a global movement and that many Australians also supported regulation.
“Consumer advocates everywhere were calling for similar reform. Working collaboratively with like-minded allies and organisations here in Australia and internationally helped us understand common issues and differences with BNPL, to help guide our campaign,” said Rosie Thomas, Director, Campaigns and Communications at CHOICE.
“Moments like the joint statement, where everyone comes together to show that there is a global movement supporting these ideas, are very powerful,” she said.
POWERFUL PARTNERS
In the UK, the Which? campaign saw policymakers commit to regulate the country’s BNPL sector, which is expected to come into force in 2026 as part of a review of the Consumer Credit Act.
And after years of campaigning, Australia enacted federal legislation regulating the use of buy now, pay later credit, which took effect in 2025.
“By closing the Buy Now Pay Later loophole, consumers will receive the same protections as for any other credit product. Protections will be in place to make sure that we can stop the sort of debt spirals or unsustainable amounts of credit being taken through BNPL products,” said Thomas.
For BNPL users, regulation means access to clear information on each BNPL product, credit checks, lower fees, and more protection when things go wrong.
Success stories like these help demonstrate the importance of putting the consumer voice front and centre in policymaking, to ensure the real-world experiences of consumers are heard and considered alongside industry concerns and political agendas.
