Shocking Truth: 50% of UK Buy Now Pay Later Users Unaware of Hidden Late Fees!
Buy Now Pay Later (BNPL) services have gained immense popularity in recent years, particularly in the UK. According to a recent study by Citizens Advice, over 15 million adults—more than one in four—are expected to rely on BNPL options to manage their holiday spending.
Awareness and Usage of BNPL Services
Despite the surge in popularity, a new study conducted by RFI Global for the non-statutory regulator, the LSB, reveals some concerning statistics about BNPL users:
- Only 52% of BNPL users are aware of potential late payment fees.
- Approximately 50% know the approximate amount of these fees before they incur them.
- About 15% of users have faced late fees, with this figure increasing to 22% among those with ‘poor’ or ‘very poor’ credit scores.
Decision-Making at Checkout
Interestingly, the data indicates that:
- Just over a third of BNPL users make their decision at the checkout stage.
- Three-fifths of users are unaware that BNPL products are currently unregulated.
Upcoming BNPL Regulations
In response to the rising concerns surrounding BNPL services, the UK Government announced plans to implement regulations that will bring these companies under the supervision of the FCA and enforce the Consumer Credit Act. However, the LSB has noted that these regulations are not expected to take effect until 2026 at the earliest.
Expert Insights on Consumer Awareness
Emma Lovells, Chief Executive of the LSB, emphasized the importance of awareness regarding BNPL products, stating: “The Government’s announcement on BNPL regulation was very welcome, but in the period before regulation comes in, lenders can’t rest on their laurels. More awareness of products and what is required from customers is needed, along with proactive outreach, especially for those experiencing financial difficulty.”
For more information on BNPL regulations and consumer rights, visit Citizens Advice.
