Buy Now, Pay Later (BNPL) promises quick, interest-free credit. But new research reveals it is being weaponised as a tool of control by the perpetrators of family and domestic violence.
When people think about domestic and family violence, what usually comes to mind is physical abuse. The more invisible forms, such as financial abuse, often go under the radar.
This hidden harm is the focus of new research led by Monash Business School’s Associate Professor Vivien Chen, with RMIT University’s Dr Jozica Kutin and Professor Roslyn Russell.
The study exposes how BNPL platforms are being exploited by perpetrators of family violence, leaving victim-survivors saddled with debt, struggling with poverty and at heightened risk of entrenched disadvantage.
“Coerced debt is hidden in plain sight,” A/Prof Chen said. “Recognising it is the first step to doing something about that weaponisation.”
Debt as a weapon
Marketed as a simple, interest-free payment option, BNPL is now used by nearly one-third of Australians, with transactions reaching $19 billion in 2022–23.
But for survivors of family violence, its ease comes at a cost.
“It’s easy to sign up online,” A/Prof Chen said. “The minimal identification requirements allow perpetrators to impersonate victim survivors online, take out BNPL without their knowledge, and leave victim survivors with coerced debt.”
Perpetrators exploited BNPL in two key ways. “One is through identity theft, where perpetrators use their partner or ex-partner’s details, and the second is coercion,” she said.
“Perpetrators memorise PINs, use threats and a range of other tactics, spending on themselves, and leaving the debt in victim survivors’ names.”
Calculating the human cost
The research team surveyed and interviewed financial counsellors who assist survivors to understand how BNPL intersects with family violence.Their findings are alarming.
“We found around 12.5% of clients had been coerced into BNPL debt, 4.2% had experienced identity theft, and around 2% experienced both,” Dr Kutin said.
Victim survivors described coerced BNPL debt as deeply distressing, compounded by relentless harassment from debt collectors through calls, texts, and emails.
Even after separating from abusive partners, the coercive control continued through financial abuse.
Financial counsellors reported negotiations on behalf of clients were slow and difficult.
The study found coerced BNPL debt damages victim survivors’ credit records, and limits access to finance, leaving survivors trapped in long-term financial hardship and housing insecurity — issues highlighted by the Victorian Royal Commission into Family Violence, which documented the emotional toll and persistent hardship caused by abusive debts.
Survivors’ poverty
The research also revealed clients with BNPL debt had higher rates of family violence: 37.5% experienced financial abuse, 33.3% emotional abuse, and 22.9% physical abuse within the past 12 months.
“The overwhelming majority (86.2%) of clients with BNPL debt struggled to make repayments, and 77.7% missed payments, which pushed them further into financial hardship,” Dr Kutin said.
What surprised researchers was that most clients with BNPL debt — primarily women — used BNPL for essentials.
“Around 52% of people with BNPL debt said they were using it for food and groceries, 34.4% for children’s items, 22.9% for clothing or shoes, 17.7% for utilities and 15.6% for transport,” she said.
For the team, the findings are sobering.
“Victim survivors shouldn’t have to use BNPL to pay for food and other essentials. Studies show that family violence is linked to longer-term poverty and homelessness, but less is known about strategies to disrupt the harm,” Prof Russell said.
“Our research sheds light on how we can prevent BNPL-related financial abuse and intervene early before victim survivors sink deeper in debt.”
Breaking the cycle
The researchers argue that regulatory gaps leave survivors exposed. BNPL loans under $2000 are subject to reduced responsible lending obligations, yet most BNPL transactions fall below this threshold.
Providers have an opportunity to act as socially responsible lenders by adopting ‘safety by design’ measures such as stronger identity checks and affordability assessments that could prevent coerced debt before it begins.
“We’d also like to see family violence policies across all credit providers, with teams trained to respond sensitively to disclosures of financial abuse, and debt waivers where appropriate,” A/Prof Chen said. “The Australian Banking Association guidelines are an example that can be adapted for digital platforms.”
Society has increasingly recognised the need for businesses to have a ‘social license to operate’. Businesses need to consider their impacts on people.
The private sector can also play a greater role in supporting survivors. Through targeted philanthropy and partnerships with charities, businesses could provide fast, debt-free assistance, helping victim-survivors escape abusive situations and rebuild their lives.
“Our research shows that women become trapped in long-term poverty because of coerced debt,” Prof Russell said. “But by shining a light on this issue, we can start to break the cycle.”
This research is supported by Australian Research Council Linkage Grant LP130101022 and is part of the Harmful Financial Products project based at Melbourne Law School, The University of Melbourne, where Associate Professor Vivien Chen is an honorary research fellow.
If you are experiencing financial abuse, help is available. Please call 1800RESPECT or the National Debt Helpline 1800 007 007.
