Worries over 'buy now, pay later' deals

Worries over 'buy now, pay later' deals

Backdated interest payments are leaving young people with unexpected bills from "buy now, pay later" deals, a charity has warned.

Citizens Advice said that thousands of people in their 20s who signed up to offers were struggling with debt.

These deals allow people to delay paying for items for an agreed period of time, such as six or 12 months.

Yet failing to pay in full by an agreed date brings interest charges backdated to the start of the agreement.

Missing a payment deadline could leave people with bills amounting to twice the original price, Citizens Advice warned.


The charity said this was a persistent issue, having helped 24,000 people with 50,000 catalogue or mail order debt problems in the past year.

These people had an average debt of ?1,300, with young adults aged 25 to 29 most likely to have problems with catalogue debts.

Citizens Advice said its analysis of 250 cases revealed cases of high fees, inadequate affordability checks and poor debt collection methods, such as repeated demands for repayments from debt-ridden customers.

It is calling for the financial regulator to ensure providers display potential charges clearly, and make it clear that a failure to repay will lead to backdated interest payments and additional late payment fees.

"Buy Now, Pay Later deals help people spread the costs of catalogue purchases but it is vital customers understand what they are signing up for and what will happen if they fail to repay on time," said Citizens Advice chief executive Gillian Guy.

"Clearer explanations by catalogue firms when advertising these deals will prevent people being hit with shock bills that could send them spiralling into debt."

The Financial Conduct Authority (FCA) is conducting a review into high-cost, short-term credit, including catalogue debt.

"We will look across all high-cost products to build a full picture of how these are used, whether they cause detriment and, if so, to which consumers," an FCA spokesman said.

Any proposals will be published in the summer of 2017.



Add Comment

all comments

  Other news

more
Burning boats

Burning boats..

26-Jul, 23:41

Outside Libyan waters, it has deployed military vessels to disrupt the...

Man arrested after live cobras found inside potato chip cans

Man arrested after live cobras found inside potato chip cans..

26-Jul, 15:20

A California man was arrested after a package addressed to him was found...

California independence 1 step closer as AG paves way for potential 2018 Ďreferendumí

California independence 1 step closer as AG paves way for potential 2018 Ďreferendumí..

26-Jul, 07:10

A new California independence campaign has got the go ahead to collect...

Ohio puts child killer to death with controversial lethal injection drug

Ohio puts child killer to death with controversial lethal injection drug..

26-Jul, 16:30

Ohio carried out its first execution in more than three years as child...

Trump's 'deportation force' begins to take shape

Trump's 'deportation force' begins to take shape..

14-Apr, 12:48

President Trump's campaign promise for more aggressive immigration...

New EPA head's emails indicate close ties to oil and gas producers

New EPA head's emails indicate close ties to oil and gas producers..

22-Feb, 18:02

More than 7,000 pages of emails from Environmental Protection Agency head...

Prince William, Princess Kate face off in rowing competition

Prince William, Princess Kate face off in rowing competition..

20-Jul, 16:11

Prince William won bragging rights today in Heidelberg, Germany, as his...

Stabbed London Bridge officer tells of fighting attackers

Stabbed London Bridge officer tells of fighting attackers..

28-Jun, 17:24

A British Transport Police officer who fought off three extremists in...