Citizens Advice seeing increasing problems with ‘Buy Now Pay Later’ schemes

citizens adviceCITIZENS Advice has found one in 12 people turned to Buy Now Pay Later (BNPL) to cover basic costs – such as food and toiletries – in the last six months.

BNPL is often advertised at checkouts as an easy way of splitting or delaying payments on items such as clothing or electronics. But it remains unregulated, and Citizens Advice is particularly worried about the rise of firms offering BNPL for food shopping in the past few years.

The charity’s frontline advisers have been raising red flags on the problems they’re seeing, including a parent using BNPL to buy baby clothes while waiting for a benefit payment and someone in debt using BNPL for the weekly food shop.

Citizens Advice discovered young people, those in debt and those claiming Universal Credit, are at least twice as likely to have used BNPL for essentials than the general population.

‘It was either use Buy Now Pay Later or starve, so I used it’

Audrey, a pensioner, used BNPL for a £40 food shop as she didn’t have enough money for food that month.

Despite struggling to repay, which Audrey has managed to do, the BNPL provider has bombarded her with offers to borrow hundreds of pounds more. She has never used it again.

Audrey said: “It was either use Buy Now Pay Later or starve, so I used it at that particular time. I sort of knew I would struggle to make the repayments but I did not have any other way of getting food. I bought canned food as they are non-perishable and would last me longer.

“I have been struggling to repay the money. They constantly harass me, calling me for payments. It’s really stressful, as if I could afford to pay it back straight away, I would.

“This company also sends me texts and emails offering £100 credit and even £500. It makes no sense as I can’t even manage to repay £40, how would I repay £100 or even £500?”

Gillian Percival, a benefits caseworker at Citizens Advice, said: “Buy Now Pay Later is a double-edged sword. It can be useful if you understand what you’re getting into, but if you’re using it out of desperation you probably have no way to repay.

“We try to help people with foodbank and fuel vouchers, but some people are embarrassed to ask for help if they’re struggling.

“If they use Buy Now Pay Later, they’re invisible. They don’t need to speak to anybody – with a few clicks they can borrow instead.

“They can resolve their problems immediately without having to worry about the consequences.”

Citizens Advice has been calling for urgent regulation of the sector, including for consistent, market-wide affordability checks and for BNPL firms to make the consequences clearer for consumers if things go wrong.

Dame Clare Moriarty, chief executive of Citizens Advice, said: “The fact that people are turning to Buy Now Pay Later for their groceries really hammers home the urgent need for industry regulation.

“As living costs spiral, we fear more people in desperate situations will see this unregulated form of credit as the answer.

“The government must keep pace with these firms and ensure consumers are protected.”

For help with problems relating to debt, cost of living rises or other issues, Citizens Advice in Lyme Regis has drop-in advice sessions on Wednesdays 10am to 3pm at Lyme Regis Town Council offices, Church Street, DT7 3BS.

Alternatively telephone Freephone 0800-144-8848 or send an email using the contact form on the website www.bridportca.org.uk

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