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Buy Now Pay Later rules won’t stop people being hit by these unexpected costs, says Citizens Advice

12 June 2019

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.

The use of these deals is more prevalent among people who are vulnerable due to their health or financial situation. Citizens Advice figures show:

  • 54% live in social housing
  • One in three (33%) are single parents

The charity provided evidence to the regulator’s Buy Now Pay Later consultation in March 2019.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Buy Now Pay Later borrowing can be a useful way for people to spread the payment for an item. But many do not fully understand the repayment terms involved in these deals.

“One of the problems we see is how interest is backdated at the end of the “interest free” period. People can get into trouble as they don’t realise charges can be applied in this way

“The new rules won’t stop people being hit by these unexpected costs on unpaid amounts. To better protect people, the FCA should go further and only allow firms to charge interest once the promotional period ends.”

Notes to editors

  1. Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
  2. Citizens Advice is the statutory consumer advocate for energy and post. We provide supplier performance information to consumers and policy analysis to decision makers.
  3. The Citizens Advice Witness Service provides free, independent support for prosecution and defence witnesses in every criminal court in England and Wales.
  4. Citizens Advice offers Pension Wise services at 500 locations in England and Wales.
  5. Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  6. To get advice online or find your local Citizens Advice, visit
  7. For consumer advice, call the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 to talk in Welsh.
  8. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
  9. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.