"That $80 a fortnight is not going to last them eight weeks. Then at about week five they'll go back to [the butcher] and get some more meat. So they now have another $20, plus the $20 they're still finishing up from the first [plan].
"So you can see how it snowballs, and they're just buying their meat."
Fage said she had another client who was a beneficiary and was struggling to pay off 10 different buy-now, pay-later plans.
"I've got nothing against the companies that use [BNPL], I have no problem with that - they are just finding a way to make a sale.
"But I would like to see some sort of regulation around how that happens."
Fage is backing a FinCap submission to MBIE asking for BNPL schemes to come under the rules of the Government's recently amended Credit Contracts and Consumer Finance Act (CCCFA).
The CCCFA demands lenders closely look at an applicant's money situation and justify whether they can fit the repayments into their budget.
The act has come under scrutiny because of the way banks have interpreted it and tightened lending to people trying to get a mortgage.
Fage said the hardest part of the BNPL issue for financial mentors was trying to get clients to control their spending.
"I'm always going on about the fact that 'your money is your personal responsibility, what happens to it and how it works for you is your responsibility.
"Some people don't have the skills to be able to tackle that - they're just swept along with whatever's happening."
The BNPL services that operate in New Zealand are Afterpay, Humm, Zip, Laybuy, Latitude (Genoapay), Openpay and Klarna.
MBIE describes BNPL as a product that allows consumers to receive goods and services
immediately but pay for them in instalments over a specified period (one to three
months) interest-free.
The ministry will decide on its preferred option for BNPL product regulation after it has read through submissions it received up until December 16.
The three options proposed are to leave it as it is with the BNPL sector self-regulating, to create incentives for the industry to address ''the triggers of financial hardship'' or to bring the industry under the rules of the CCCFA.
"The feedback received will help the Government to understand and address potential triggers of financial hardship, and inform how to achieve an effective BNPL sector - one where the risks of financial hardship are balanced against the benefits of BNPL," an MBIE spokesperson said.
Several BNPL organisations were approached for comment.
Zip's New Zealand country manager Todd Wackrow said the company used a third-party credit check for all applicants in its approval process to ensure "prudent lending decisions".
"Our service is provided on a transaction-by-transaction basis with relatively low levels of credit extended - our average transaction size is approximately $150," he said.
"Further, the payback period is short and cannot be extended, and customers can repay their payments at any time earlier with no restrictions or fees."
Customers with overdue payments had their accounts frozen, Wackrow said, and they couldn't make more transactions.
"Zip's default fees are capped at $40 and do not compound - meaning debt cannot 'spiral' and potentially result in a 'debt trap' – as can happen under traditional finance such as credit cards," he said.
Zip NZ also had a 'Hardship Policy' and team to support customers who may not be able to make payments.
Humm's head of corporate affairs Emma Rackley said the company "sharply" focused on affordability when someone applied for a Humm BNPL product.
As a result, less than 1.4 per cent of customers ended up needing financial hardship support.
"We have a dedicated hardship team that works with these customers to find the most helpful outcome in the medium and longer term and the majority of our hardship customers are able to settle their accounts within four weeks."
