Millions of shoppers have fallen in love with using ‘Buy Now, Pay Later’ (BNPL) schemes, but what happens if something goes wrong?
When used correctly, ‘Buy Now, Pay Later’ schemes such as Klarna, Clearpay and Laybuy allow you to try before you buy and put off paying for what you keep for 30 days, or allow you to split your shopping into instalments, interest-free.
But what happens when things don’t go so smoothly?
Over the last few years, we’ve heard from people that have been caught up in ID fraud issues with BNPL firms and endured returns nightmares lasting months. In most cases shoppers have struggled to know who to complain to and how to get their issue resolved.
We want to understand the bad experiences shoppers have had when using these schemes and are encouraging users to fill in a BNPL complaints form to share their woes.
How are BNPL complaints handled now?
Right now BNPL complaints are handled by individual companies and can’t be taken to the Financial Ombudsman Service (FOS), like you can with other payment methods like a credit or debit card.
That’s because most BNPL schemes aren’t currently regulated by the Financial Conduct Authority (FCA).
So if there is a problem with an order that you paid for using a BNPL scheme, you will need to get in touch with the retailer and/or the scheme provider to get a dispute resolved. If they don’t help, or are slow to respond, you may be left in limbo.
Why the FOS is important for payment complaints
The FOS can step in if you aren’t happy with how a payment provider has handled your issue.
It’s an independent body that will consider both sides of a case, and decide whether the company or the customer was in the right. If the FOS rules in your favour, it can order the firm to refund you or pay you compensation.
But the FOS offers more than an independent judgment on an issue, it also provides a vital overview of what complaints consumers are making about particular industries – data which can uncover worrying trends that need to be addressed.
For example, Which? recently found that the FOS ruled in favour of fraud victims in 73% of its cases where banks had initially refused to repay the losses. This data allowed us to expose a reimbursement lottery and provide proof that there are failings in protections for scam victims. This work along with other Which? investigations has helped convince the government that bank transfer scam victims deserve better protection.
But currently, no one is quite sure who the most-complained-about BNPL provider is or what issues they, or the wider industry as a whole, keep getting wrong.
Use our BNPL complaints form
It’s worth noting that the Treasury is consulting on regulating the BNPL market which could mean shoppers would be allowed to take their complaints to the Financial Ombudsman Service.
But until then, there isn’t really a clear route for consumers to take action and fight back against BNPL companies with poor practices, so we’ve created a form to make sure your complaints get heard.
We want to hear from you about any issues you’ve encountered when using a BNPL scheme to pay – and if you have got that far, how they were resolved.
It could be anything from unfair late payment fees to damage to your credit score or just issues that meant you had a less than smooth experience with your order.
We think it’s important to gather these experiences so we can show the government what dangers shoppers face in this rapidly growing sector.