Charity calls for 'buy now, pay later' controls
A quarter of young adults making ‘buy now, pay later’ repayments have struggled to pay for food, rent or other bills as a result, says the Citizens Advice charity.
The charity said that 24% of 18 to 34-year-olds using such schemes in the past 12 months admitted they had been unable to pay for food and other bills and wants tighter regulation of how they are advertised on online checkouts.
Citizens Advice says buy now, pay later firms must overhaul their checkout processes, to ensure shoppers are not encouraged to spend more than they can afford and improve affordability checks.
The charity is shaing its research with the Financial
Conduct Authority as it decides how buy now, pay later firms will be regulated.
Alistair Cromwell, acting chief executive of Citizens Advice, said: "Buy now, pay later borrowing can be like quicksand – easy to unwittingly slip into and much more difficult to get out of.
"It shouldn't be possible for people to sign up for credit without realising, and the fact this is happening so often signals that a drastic overhaul is needed."
The Government announced in February that interest-free buy now, pay later credit agreements are to be regulated by the FCA – after a review of the unsecured credit market recommended bringing such firms under the regulator's supervision.
A Treasury spokeswoman said: "Buy now, pay later can be a helpful way to manage your finances but it's important that consumers are protected as these agreements become more popular. By stepping in and regulating, we're making sure people are treated fairly and only offered agreements they can afford."