One in eight online 'pay later' shoppers chased by debt collectors

One in eight shoppers using online ‘buy now, pay later’ schemes have been chased by debt collectors, while users have been charged a total of £39million in late fees over the past year, warns leading charity

  • Citizens Advice warns one in eight ‘buy now, pay later’ shoppers chased by debt collectors
  • Research showed users of the plan were charged £39million in late fees last year
  • None of the ‘pay later’ checkouts warned customers about use of debt collectors

One in eight shoppers using online ‘buy now, pay later’ schemes have been chased by debt collectors, Citizens Advice warned.

Research by the charity revealed users of the increasingly popular credit repayment plan were charged £39million in late fees over the past year.

But not one of the ‘pay later’ checkouts – which is a payment option on some on leading retailers’ websites – warned customers they could be referred to debt collectors for missed payments. 

One in eight shoppers using online ‘buy now, pay later’ schemes have been chased by debt collectors, Citizens Advice warned (stock image)

Citizens Advice is calling on the Treasury to urgently regulate the rapidly expanding sector, fearing shoppers have been left unprotected and ill-informed.

The charity looked at 100 leading retailers and found 38 offered the payment system. 

Out of those, only 11 per cent warned shoppers they were taking out a credit agreement while 89 per cent put it in the small print. 

Citizens Advice asked the firms in the research if they ever referred customers to debt collectors. 

But not one of the ‘pay later’ checkouts – which is a payment option on some on leading retailers’ websites – warned customers they could be referred to debt collectors for missed payments (stock image)

Klarna, Clearpay, Laybuy and Openpay said they did this as a last resort. Splitit said it did not and PayPal refused to comment.

Millie Harris, of Citizens Advice East Devon, said the schemes give consumers a ‘false sense of security’, adding: ‘My concern is that people aren’t processing the fact that buy now, pay later is credit.

‘They are taking out what is effectively a loan, but they don’t see it as one. It’s almost under-the-radar debt.’

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