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Buy Now Pay Later: Citizens Advice response to CP18/43 - consultation on Buy Now Pay Later offers

22 March 2019

Buy Now Pay Later: Citizens Advice response to CP18/12 - consultation on Buy Now Pay Later offers [ 110 kb]

We helped 25,332 people with catalogue and mail order debt last year. This is the second most common high-cost credit issue after brought to Local Citizens Advice. Local Citizens Advice see more clients with catalogue and mail order debt issues than doorstep loans, payday loans and rent to owns problems, forms of credit that have been the subject of much greater investigation.

Buy now pay later (BNPL) promotions allow people to delay or spread the payment of a good or service for a certain amount of time. They generally feature as part of firms credit offers like catalogue credit, store cards and retailers that offer finance at the point of sale. BNPL can be a useful way of spreading the payment for an item, particularly when a customer knows the will be better able to pay at some point in the future. Many do not fully understand the repayment arrangements involved in these deals, however, getting into trouble when the promotional period ends.

  • Many people struggle to make the cost of repayments. The most common problem faced by our clients with catalogue credit debts is dealing with debt repayments. This accounts for over 80% of the catalogue problems that are brought to us.

  • Catalogue credit and buy now pay later borrowing is more prevalent among vulnerable groups. Clients we see with issues relating to these forms of credits are 5 percentage points more likely to have a disability compared to average Citizens Advice client. 54% live in social housing and on in three (33%) are single parents.


We welcome the FCA’s interventions into the BNPL market but believe the scale of detriment for consumers requires a more comprehensive approach.

  1. Interest should only be charged after the promotional period ends. Consumers are confused about the nature of BNPL arrangements and charging interest during the ‘interest free’ period causes significant detriment when the promotional period ends.

  2. The FCA should look in more depth at BNPL business models. These promotions appear to require some consumers to be given credit they cannot afford, this requires further investigation.