Dame Clare Moriarty, General Manager of Citizens Advice, said: “The sheer number of buyers facing debt collections is appalling. We know from our front line advisors how much stress this can cause. The “buy now, pay later” industry has exploded and we need consumer protection to keep pace with changes in the way we live. We hope the Treasury Department can keep up. “
What is the government saying?
A Treasury Department spokesman said, “Buy now, pay later can be a helpful way to manage your finances, but it is important that consumers are protected as these arrangements become increasingly popular. By intervening and regulating, we ensure that people are treated fairly and only offered agreements that they can afford. “
What do BNPL companies say?
Clearpay, Klarna, Laybuy and Openpay, four of the largest BNPL providers in the UK, have all told us that they only refer customers to debt collection agencies as a last resort.
A Clearpay The spokesman said, “It is important to note that when we share customer information with the agency, we retain full control of the customer relationship, do not report reports to rating agencies, and never share customer information with aggressive doorstep collectors.”
Alex Marsh, head Klarna UK, added: “At Klarna we only use debt collection agencies to help us contact customers we cannot reach, and we do this on less than 1% of orders. The debt collection agencies we work with are all authorized by the Financial Conduct Authority and will only contact customers by phone or email and will not use bailiffs. “
A Laybuy The spokesman said, “When a claim is forwarded to a debt collection agency, we always only refer to the outstanding purchase price of the product. Late fees, capped to a maximum of £ 24 on a single order, are never passed on to a debt collection agency. Laybuy will also cover all of the collection costs. “
Georgina Whalley, Interim UK Chief Executive and Group Chief Marketing Officer of OpenpayHe added: “We are referring some outstanding payments to third parties, but Openpay customers are only contacted via SMS, email and mail – never in person.”