- An “enormous level of anger and frustration”
Credit manager believes many feel marginalised
- Comyn pushes back on BPNL claims
Zip Co and Afterpay companies accuse banks of forcing customers to close their BNPL accounts. The head of Australia's largest bank says that's baloney
- Lenders tighten mortgage scrutiny as lockdowns drag on
Property buyers could find that qualifying for a mortgage is harder this week
Commonwealth Bank has rejected allegations that it is pressuring customers to delete their “buy now, pay later” accounts in order to get approved for a mortgage.
Earlier this week, Peter Gray, co-founder of BNPL company Zip Co, told a parliamentary committee that Australian banks are forcing mortgage applicants to close their BNPL accounts in order to get their applications approved.
“The number-one reason for customers closing their Zip account is that the bank has told them they need to in order to proceed with the mortgage,” Gray told the committee. Gray said the banks were pressuring customers to close BNPL accounts not because it was necessary for them to be able to meet repayments, but because banks saw BNPL services as competition.
“We’re clearly a competitive threat in the way we’ve provided clearer, transparent and more fair solutions to what’s traditionally been [banks’] target market,” Gray said.
However, CBA chief executive Matthew Comyn denied the allegation, according to a report by InnovationAus. Speaking to the same parliamentary committee the next day, Comyn insisted that BPNL services were not treated any differently than more traditional credit products.
“I have not seen or heard anything like that in the industry,” Comyn said.
CBA offers its own BPNL service through Swedish provider Klarna.
Comyn told the committee that while customers can be advised to consolidate credit products to increase their borrowing ability, BPNL services are treated no differently by his bank or others.
“I’ve not seen any evidence of targeting of particular products across the industry,” he said.
However, BPNL company Afterpay has also said its customers have told it they were instructed to delete their accounts in order to receive mortgage approval.
Comyn also pushed back against BPNL provider claims that their users have a higher credit score on average than bank customers, InnovationAus reported.
“We see higher incidents of customers going into arears, higher instances of customers going into overdraft, higher instances of customers – as a proportion of BPNL – that are receiving financial assistance,” he said.
Ryan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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