This information has been prepared by IG, a trading name of IG Australia Pty Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Shares of buy-now-pay-later company Afterpay Touch Group dropped as much as 18% upon close of market on Wednesday, amid news of a looming senate inquiry into payday lenders.
The proposed senate enquiry will investigate pay day lenders, consumer leasing businesses and other fintech companies in the industry.
Pay lender companies like Afterpay, ZipMoney and ZipPay have previously been under fire by consumer groups for allegedly exploiting loopholes in lending laws.
They've faced critics from among consumer rights groups that worry the buy-now-pay-later concept could potentially put thousands in debt.
Shadow financial services spokeswoman, Clare O'Neil, said the inquiry would look at the financial counselling sector's capacity to service this part of the community.
“I have been speaking with Australians around the country who are victims of misconduct by financial service providers," Ms O'Neil said in Parliament on Wednesday.
Zip Company Limited’s (ZipMoney) shares also fell upon the news, dropping 13% upon market’s close on Wednesday, mimicking Afterpay’s rapid share fall.
Senators in parliament, including Greens independent Derryn Hinch have reportedly backed the proposed inquiry, assuring it would have the votes to pass the Senate.
.jpg)
