One in ten shoppers using buy now pay later schemes have missed payments and have been referred to debt collectors, according to new research.
The schemes have proved popular during the pandemic, allowing shoppers to split their payment across, for example, three months.
Klarna, PayPal, Clearpay, Laybuy and Openpay are among the providers.
Research commissioned by Citizens Advice found that shoppers had also been charged £39m in late payment fees in the past year. It says consumers were ‘ill-informed’ over the terms of the credit.
‘The sheer number of shoppers facing debt collection is startling. We know from our frontline advisers just how much stress this can cause,’ says Clare Moriarty, Citizens Advice chief executive.
The Government announced in February that interest-free buy now pay later credit agreements will be regulated by the Financial Conduct Authority.
