Buy now, pay later scams are on the rise

Buy now, pay later offers are especially popular with young consumers who can pay for purchases in installments even though they have little or no credit history. Guess what: Scammers love the repayment plans, too.

Merchants report a growing number of cases where thieves have stolen account information to make unauthorized purchases on everything from gaming consoles and big-screen televisions to groceries and carryout orders for pizza.

Among those most at risk? Eighteen to 24-year-olds, according to a recent report from Seon, a fraud prevention firm based in the United Kingdom that works with retailers worldwide.

The research firm noted in a recent survey that more than 61% of consumers ages 18 to 24 reported using the innovative repayment plans known as BNPL — more than any other age group. Those results mesh with other similar surveys.

While Seon’s research found that those over age 54 are currently most at risk of being scammed, that’s no reason for teens and other heavy users to drop their guard. Parents shouldn’t ignore the risks to their children either.

BNPL plans — offered by companies such as PayPal, Klarna and Afterpay, along with the likes of Mastercard and American Express — are similar to traditional retail installment repayment services that have been around for decades. They are essentially instant loans, with a relatively small down payment required.

But with buy now, pay later, shoppers not only get the product immediately either online or at a store, but pay for it in four or five equal installments and often interest free. Some providers don’t even require a credit check on users.

For young consumers who don’t have credit cards, BNPL programs offer a much easier way to make expensive and inexpensive purchases. Of course, the service also is a recipe for overspending and falling deeper into debt.