Buy now, pay later schemes see sharp rise in consumer complaints

BUY now, pay later schemes, increasingly used by high-street brands, were the fastest growing area for customer complaints last year, figures show.

Consumer mediation service Resolver revealed today it received just over two million complaints in 201920, up from 1.4 million the year before.

The biggest driver for the rise was the August deadline for complaints about payment protection insurance (PPI), which was widely mis-sold by high-street banks.

Customers made 1.1 million about PPI, compared 550,000 the year before.

Although buy now, pay later credit only accounted for a small number of complaints overall, it was the fastest growing area, rising 243 per cent, from 2,625 to 9,016.

“[It’s the] easiest way to get into debt in the modern age,” said Martyn James at Resolver.

Such schemes offer either one or two years of interest-free credit on bigticket items or short-term credit that allows customers to defer payment for a period, usually around three months.

The latter were popularised by online fashion outlets but have increasingly been adopted by well-known high-street names, with Marks and Spencer launching a buy now, pay later scheme late last year.

Mr James said credit was sometimes sold as a “lifestyle choice” but that the payment process could be “complicated and hard to understand”.

“Increasingly we’re getting more and more complaints about the new ‘pay in a few instalments’ that you’ll see on almost every major retailer’s website at the checkout.”

He added: “It’s not always easy to find out how much interest you might pay and what happens if you default.”

Alex Neill, the chief executive of Resolver, said: “Our predictions are that complaints about credit, finance and utilities will increase significantly.

“There are challenging times ahead for everyone – and it’s worth all businesses remembering that those who respond quickly, fairly and satisfactorily to their customers are the ones who will succeed.”