The Financial Conduct Authority’s rules on Buy Now Pay Later borrowing won’t stop people being hit by unexpected costs, says Citizens Advice.
Buy Now Pay Later borrowing includes catalogue credit, store cards and retailers that offer finance at the point of sale (which can be in store or online).
The national charity helped over 25,000 people with problems due to catalogue and mail order products last year. These debts are the second most common high-cost credit issue, after overdrafts, Citizens Advice helps people with.
The charity supports more people with catalogue and mail order debts than those with other high-cost credit debt due to doorstep loans, payday loans or rent-to-own. These other forms of credit have been the subject of much greater investigation by the FCA.
The most common problem faced by people Citizens Advice helps with catalogue and mail order debts is dealing with debt repayments. This accounts for over 80% of the problems that are brought to the organisation.