The first review of the "buy now pay later industry" by the Australian Securities and Investments Commission has found that the sector is influencing the spending habits of consumers, especially younger consumers - and not necessarily in a positive way.The six providers examined were: Afterpay, zipPay, Certegy Ezi-Pay, Oxipay, BrightePay and Openpay.  The first four companies named are part of larger ASX-listed companies. The rapid growth in the sector, as outlined in the report, has been eye-catching. The number of consumers who are part of what ASIC called "this diverse and evolving market" has increased from 400,000 to two million since 2015. Balances outstanding are now touching A$1 billion ($903 million as at 30 June 2018). These are mostly in the form of fixed term contracts of up to 56 days for amounts up to $2,000, although ASIC reported lines of credit for amounts up to $30,000 from Brighte and Certigy. ASIC Commissioner Danielle Press said the typical "buy now pay later" consumer is young, with 60 per cent aged between 18 to 34 years old.  One in six users had either become overdrawn, delayed bill payments or borrowed additional money because of a buy now pay later arrangement"We found that buy now pay later arrangements can cause some consumers to become financially overcommitted and liable to paying late fees," she said.Technically, the industry falls outside the National Credit Act as it generally earns its income from fees, not interest, so providers are not required to be licensed or to comply with the responsible lending laws that prohibit a lender from providing credit that would be 'unsuitable' for the consumer. However, these arrangements are considered 'credit facilities' under the ASIC Act, bringing conduct that is misleading or unconscionable into focus. "One area we will be targeting is where consumers are paying more than they need to for using a buy now pay later arrangement," Press said.The corporate regulator said a broad understanding of this growing industry was needed to identify potential risks for consumers. It tested each of the providers' performances in areas such as transparency, dispute resolution and hardship. "As a result, all of the providers have made improvements that will benefit consumers. For example, all of the providers are now members of the new Australian Financial Complaints Authority, and all of the providers are reviewing their standard form contracts for potentially unfair contract terms," ASIC stated.ASIC said it will continue to collect data to monitor the adequacy of consumer protections in this sector and review changes made by buy now pay later providers.