A new consumer code for retailers of ‘new energy tech’ products such as solar panels, batteries and EV charging systems has been authorised by the Australian Competition Tribunal, with conditions.
The New Energy Tech Consumer Code (NETCC), which will make the problematic CEC Approved Solar Retailer scheme eventually obsolete, sets minimum standards of good practice and consumer protection in relation to all aspects of customers’ interactions with participating retailers.
The Code has had a long and very bumpy journey, with one of the thorny points being “buy now pay later” (BNPL) finance providers.
SQ founder Finn Peacock wrote in detail about BNPL and the Code (and other aspects of the NETCC) in February this year; after a push from various parties to exclude BNPL from solar power system sales and the Australian Competition and Consumer Commission (ACCC) made amendments to the Code to tighten up some BNPL practices.
While the ACCC acknowledged “buy now pay later” finance was valued by consumers, it believed greater protections were required to reduce the risk of harm to consumers from entering into unsuitable or unaffordable finance arrangements.
However, the Tribunal has varied the ACCC’s conditions of authorisation in relation to the requirements that BNPL finance providers must meet, and imposed a condition removing the prohibition on BNPL finance being offered in unsolicited sales of new energy tech.
Based on the evidence presented, the Tribunal concluded BNPL finance did not generate material consumer harm and there was substantial detriment in restricting BNPL finance options to consumers. It concluded any harm that may arise by unlawful selling of BNPL products could be reduced by the consumer protections contained in the Code.
“The Tribunal considers that unregulated consumer credit in the form of “buy now pay later” finance is a significant and popular form of finance used by consumers to acquire New Energy Technology products desired by those consumers and therefore the supply of such finance provides economic benefits.”
The ACCC notes ASIC is actively considering whether the National Consumer Credit laws should be extended to cover BNPL finance.
Mandatory Standards
The Tribunal also removed the Code administrators’ ability to impose mandatory standards at their whim regarding new energy tech products and services.
The Tribunal commented:
“An agreement between competitors to abide by agreed mandatory standards could be used to restrict innovation and competitive offers by solar panel merchants in the future. This could result in unknown public detriments arising in the future, making it difficult for the Tribunal to be satisfied that the overall balance of public benefits and detriments arising from the code meets the test for authorisation.”
The Australian Competition Tribunal’s summary determination can be viewed here and full conditions of authorisation here.
In somewhat related news, the ACCC published its Solar Retailer Code Of Conduct Draft Determination concerning its re-authorisation last month. The Clean Energy Council sought further re-authorisation of the Code due to delays with the NETCC.
About Michael Bloch
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Although interest bearing is better, the issue is that the cost of it usually is about the same or even more expensive with the hidden fees and charges with the addition of misleading base rates.
Plenti advertise a 6.5% interest rates but with their fees it works out to be over 10% comparison rate and usually more. I’ve been stung with a monthly fee, set up cost and risk fee – with the assumption that the set-up cost includes a commission to the solar installer equating to nearly $700+ on fees and a monthly fee of $3.
My $10,000 system ended up being financed for $10,700 and the end cost totalled $14787 over 5 years with my comparison rate at around 13%
On the other hand, Brighte offer a higher base rate but a more transparent fee structure with a comparison rate of under 9%. $299 was the set up cost with a $1 a week account keeping fee.
This would’ve been $13001 as a total cost which is $1786 CHEAPER!! I felt really ripped off.
The concerning part is that the sales person I used initially did the application for me and guided me through the application literally filling it out for me which I don’t think is legal at all.
The reality is, I would’ve just preferred to use Zip or another interest free provider like Brighte as my vendor didn’t differentiate on any pricing at all. Zip or Brighte would’ve been better – Zip’s $6 a month account keeping totalled $360 which meant it would’ve been just $10360 total.
I’m sure some vendors inflate price but I don’t believe this is the standard with every vendor.
I highly do not recommend Plenti/RateSetter – more dodgier than their claims against BNPL.
Whilst the concept of interest free finance for getting domestic rooftop photovoltaic systems (and, for we who want them) with battery storage, appears good, in principle, as the shonky feral government has decided that such finance does not need regulating (because fraud and corruption, make Malignant Pillagers (MP’s) rich), the question of fraudulently hidden fees, arises.
As a good example, at
https://solar4ever.com.au/Payment_Plans.php
is
”
Interest-free deals
The saying goes that ‘there’s no such thing as a free lunch’ and these interest-free deals are a classic example of that. Retailers who sign up with finance companies (usually Certegy) are charged a fee, something like $750 for each solar deal. No great intelligence required to work out who will end up paying that fee.
”
At
https://brighte.com.au/homeowners/payment-plan/
is
”
What can I use Brighte for?
Brighte is here to meet your needs! You can use the Brighte 0% Interest Payment Plan for energy-efficient upgrades such as solar, batteries and lighting. Or for your home improvement dreams such as kitchen and bathroom renovations, landscaping and more!
To make it easy for you, we match you with Brighte accredited partners in your local area, check out who is available near you on the Brighte Marketplace
How does Brighte work?
Access Brighte 0% interest payment plan for purchases between $1k and $30k and spread the cost between 6 – 60 months.
Check out what your repayments could be with our repayment calculator
Why choose Brighte? Our mission is to make paying easy
We strive for transparency – check out the fees^
A $1/ week account keeping fee, included in your fortnightly repayment
NO FEE for early repayments or payout
NO FEE for requesting quotes through the Marketplace
NO FEE to download and access the BrightePay app
NO FEE to change your repayment date*
You should not pay any more for your goods just because you have chosen to use Brighte 0% interest payment plan over paying with cash, a debit card, credit card or any other payment method.
”
but, conspicuous by its absence, is a statement such as, at the end of that last sentence above, “because we do not charge any fees to vendors, for making our services available for sales to their customers”.
Thus, in keeping with the policy of the feral parliament – “Fraud is good, because it makes our rich party donors richer, so we get bigger “donations” “, hidden charges, which end up covertly increasing prices, are clearly, part of the deal, when using unregulated interest-free (“BNPL”) finance providers, deliberately made fraudulent by the feral parliament.
ALL “BNPL” or otherwise finance providers should be required to explicitly state all charges levied, both to the financee (?) – the person who is buying the products/services being financed, AND the vendor – the product/service provider, so that the customer will know, before even obtaining a quote for the supply of products/services, the FULL amount of ALL costs involved, should a form of finance be involved, or not.
Which is why I have previously proposed that state/territory governments should provide to their residents, fee-free (including, fee-free to vendors), interest-free, finance, for the supply and installation of domestic rooftop photovoltaic systems with battery storage (which would help stabilise the electricity grids, amongst providing other benefits).
Amongst other benefits, this would, especially at present, go a long way to stimulating state/territory economies.
And, it would help overcome the policy of the feral parliament – “Fraud is good, because it makes our rich party donors richer, so we get bigger “donations” “.
But, then, we are just the plebs, who have no determinate say in anything.
Further to my post above, is the following.
At
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Creditfinancialservices/Report/c05
are the following staatements.
“5.4 One of the fastest growing companies, Afterpay, refers to its product as a ‘budgeting tool’, and specifically states that it is not a line of credit. It does not charge interest or account keeping fees. It charges merchants for the use of the service”
“5.6 Flexigroup, the parent company of buy now pay later product Certegy Ezi‑Pay, said that for Certegy, 63 per cent of revenue comes from merchant fee income”
Note – Certegy has been renamed Humm.
At
https://www.abc.net.au/news/2020-09-03/buy-now-pay-later-regulation-fintech-senate-inquiry/12614068
is the following.
”
Consumer advocates had wanted these companies to be regulated under national consumer credit laws.
This would have ensured they face the same legal obligations as other financial services providers like credit companies, and that consumers are protected under those laws.
But the Senate Select Committee on Financial Technology and Regulatory Technology, chaired by Liberal senator Andrew Bragg, disagreed that regulation was the best way forward.
In its interim report, tabled in Parliament on Wednesday night, the Committee said: “Because innovation like ‘buy now, pay later’ often occurs on the fringes of regulation, it is inappropriate to force each innovation into a one-size-fits-all approach.”
It said, “industry self-regulation provides an initial framework to protect innovation which can later be backed up by a policy statement” by the Federal Government.
But a dissenting report from Labor senators said self-regulation under a voluntary code could fail to properly protect consumers.
It suggested the inquiry listen to calls from consumer groups for there to be additional safeguards including requiring platforms to run identity checks, cap late fees, limit multiple accounts and restrict use by minors.
The dissenting report said while these companies do not necessarily need to be regulated under consumer credit laws, they should have adequate hardship provisions for when people get into trouble.
”
So, both the LNP feral government, and, the ALP, which pretends, on occasion, to not be part of the LNP, support the premise that the so-named BNPL companies, that are, while some lie through their teeth, and deny it, and, others confirm it, credit providers, should not be regulated, and, that it is okay for them to conceal from customers, the applicable fees and charges, which include the fees charged to merchants/vendors, who must pass the fees charged to bem by the crooks, on to the customers.
And, remember, in the submission made by Brighte, regarding the New Energy Tech Consumer Code, dated 8 November 2019, at
https://www.accc.gov.au/system/files/public-registers/documents/AA1000439%20-%20New%20Energy%20Tech%20Consumer%20Code%20-%20Submission%20by%20Brighte%20-%2008.11.19%20-%20PR.pdf is
”
Fees and charges
2.14
1
Brighte has also taken steps to ensure that its fees and charges do not place its customers at
any unreasonable risk of financial hardship:
(a) Brighte provides consumers with a credit contract which contains transparent and easy
to understand terms. Brighte has simple fee structure, with a weekly account fee of
$1 and a late payment fee of $4.99 capped at $49.90 per calendar year.
(b) The simple fee structure makes it easier for customers to understand their financial
commitments to Brighte than some traditional forms of credit finance. Brighte submits
that consumers better understand financial commitments expressed in dollar amounts,
such as Brighte’s fees, than they do percentages, as is the case for personal loans and
credit cards.
(c) Moreover, the financial cost of late payment under BNPL products are potentially much
lower than traditional forms of credit, due to the 0% interest offered and capped late
payment fees on offer. This stands in contrast to the potentially high cost of late
payments for a personal loan or credit card.
Australian Security and Investment Commission, Credit licensing: Responsible lending conduct, Regulatory Guide 209,
November 2014.Page 4
Disclosure of any fees and charges – Clause 24(c)(iv)
2.15 It is unclear what the ACCC means by “merchant fees” in the proposed amendments to clause
24(c)(iv). If the ACCC intends to refer to service fees paid by merchants to BNPL providers,
Brighte is concerned this would be contrary to the intent of the disclosures required under the
NCC.
2.16 Consistent with the NCC which requires finance providers to disclose fees and charges that
are or may be payable by the customer to the finance provider, Brighte understands that the
intent and effect of the ACCC’s suggested amendment to clause 24(c)(iv) is to ensure any
fees and charges that are or may be payable by the customer (not the underlying
arrangements between credit providers and merchants, e.g. the service fees paid by
merchants to BNPL providers) should be disclosed to customers.
”
So, Brighte makes and emphasises the point that the fees that merchants have to pay to Bright, which will be passed on to customers, are to be hidden from customers, so that buying a solar system or components, using Brighte for financing, will involve fraudulent hidden charges, concealed by Brighte.
It is a bit like going into a shop, and, in using EFTPOS, if the customer pays with a credit card, the vendor charges the customer (usually) a percentage of the purchase amount, to cover the credit card fees levied by the credit card providers upon the merchant.
Merchants/vendors usually do not absorb credit charges imposed upon them, by credit providers, and, the same, from my understanding, applies to if not all, then, most, solar system vendors.
In the submission from Brighte, made 29 May 2019, at
https://www.accc.gov.au/system/files/public-registers/documents/AA1000439%20-%20New%20Energy%20Tech%20Consumer%20Code%20-%20Submission%20by%20Brighte%20-%2029.05.19%20-%20PR%20VERSION_1.pdf
is, in the third paragraph;
“Buy now pay later products are popular and lawful products which financiers such as Brighte (which is an Australian Credit Licence holder) are committed to ensuring are provided in a transparent and ethical manner.”
Bulls**t!
Now, Brighte claims that its only fees that customers have to pay, are $1 per month account keeping fee (their submission where they state that, conspicuously omits the application fee).
But, as Brighte conceals (in its being “transparent and ethical”) the fee that it charges to the vendor, which then has to pass the fee on to the customer.
Brighte says that it offers its “interest free” finance, for up to five years; 60 months, so, a customer can be charged up to $60 over the term of the finance, in account keeping fees.
But, as Brighte conceals the amount of the fee that it charges to vendors, which is then to be passed on to the customer, using, as an example, the $750 fee mentioned in my previous post, from
https://solar4ever.com.au/Payment_Plans.php
the $750 fee is massively more than the $60 account keeping fee, that Brighte dishonestly and unethically claims to be its only fee for finance.
But, then, it is “in keeping with the policy of the feral parliament – “Fraud is good, because it makes our rich party donors richer, so we get bigger “donations” “, hidden charges, which end up covertly increasing prices, are clearly, part of the deal, when using unregulated interest-free (“BNPL”) finance providers, deliberately made fraudulent by the feral parliament.”
“BNPL” is well and good – it can be helpful and useful, but, it needs to be regulated, and the credit providers, and, this should apply to ALL credit providers, should be required to publish their fees and charges, in all advertising for and by them, and, the fees and charges published, should include fees and charges charged to vendors, which, it it reasonable to expect, will be passed on to consumers.
It is unfortunate that we are stuck with the crooks that are ruling the country.
I think you’re being unrealistic with your approach in rationalising the legitimacy of BNPL.
I personally use ZIP on my transactions and the fee charged is nowhere near close to the other providers I’ve used. The merchant fee works out the same as if I was to give out a proper discount and even so they do responsible lending practices with checks and servicing.
The fact remains that traditional options are a lot more expensive expensive than some other alternatives out there and if you do a direct comparison and shop its really a no contest.
BNPL is a good thing to create competition as right now, the only legitimate interest bearing option is just too expensive to consider as an option. It’s all about getting the best deal for customers and getting money in my pocket for a sale.
Even if they where to regulate BNPL, it would be the preferred option as just the cost of Plenti is too much – 3 fees in total. And when comparing apples to apples the competition they have are way cheaper.
Angus –
I posted
”
“BNPL” is well and good – it can be helpful and useful, but, it needs to be regulated, and the credit providers, and, this should apply to ALL credit providers, should be required to publish their fees and charges, in all advertising for and by them, and, the fees and charges published, should include fees and charges charged to vendors, which, it it reasonable to expect, will be passed on to consumers.
”
What is unrealistic about that?
Do you prefer covert charges, that are deliberately concealed from consumers?
Plenti is overpriced hot garbage.