By Stuart Condie
SYDNEY–Australian credit provider Humm Group said it has been ordered to stop signing up new buy-now-pay-later customers by a local regulator over concerns about the product’s suitability.
Humm on Friday said that it had received an interim stop order from the Australian Securities and Investments Commission. It complied with the order and is seeking to engage with ASIC to urgently address the regulator’s concerns, it said.
Humm added that it is allowed to continue servicing existing customers.
The order centers on concerns over target-market determination, which relates to whether a product is appropriate for its target market and conditions on how the product can be distributed.
Australia’s federal government this week said that buy-now-pay-later services, which surged in popularity in the early months of the Covid-19 pandemic as online shopping grew in popularity, will be regulated in the same way as traditional credit providers in an attempt to address worries that some consumers are taking on too much debt.
Humm in 2022 tried to sell its consumer finance business, which includes its BNPL operation, to rival Latitude Group.
The pair agreed to terminate the deal citing tumultuous financial markets, although then Chairman Christine Christian said that fellow director and major shareholder Andrew Abercrombie had encouraged shareholders to vote against the deal and threatened legal action.
Write to Stuart Condie at [email protected]
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