Call for action over 'buy now, pay later' companies

B uy n o w, p ay l at e r f i r m s s h ou l d b e f u l l y reg u l ate d to b ette r p rote c t c u s to mers, says a leading consumer group.

Which? fears slick, easyto-access credit products are encouraging impulse buying – with 24% of buy now, pay later users saying they spent more than they planned because the service was available.

The watchdog wants the Financial Conduct Authority to get new powers to regulate providers of this type of service, arguing this would help it monitor customer treatment and be able to step in if necessary to prevent harm.

Around one in 10 buy now, pay later users told Which? they have incurred late charges and 41% of people did not know that missing a payment could lead to the firm passing matter on to a debt collection agency.

The group's call comes after consumer champion Martin

Lewis told the Treasury Committee that there has been an "explosion" of buy now, pay later schemes – many aimed at younger people.

He added: "Our political classes have failed if we regulate in two years' time.

"Two months' time would be all right."

Which? said "pushy" marketing strategies and "express checkouts" could drive people to over-spend – with fashion retailers particularly likely to feature prominent buy now, pay later adverts.

Jenny Ross, Which? money editor, said: "While buy now, pay later services offer speed and convenience, our research shows their design makes it far too simple for shoppers to spend more than they were intending.

“We believe that the FCA needs to regulate this market and be able to take action if firms treat customers unfairly."