More than half of young shoppers have bought items online with the credit option unknowingly

• Charity Citizens Advice surveyed 2,700 BNPL users
• Checkout credit borrowers are likelier to be 18-34-year-olds
• Popularity among younger borrowers has spurred fears it is too easy for these people to get into damaging debt More than half of young shoppers have bought items online with the credit option unknowingly

Checkout credit providers have been accused of making it too easy for young people to get into financial trouble, after research found they often didn't realise they were taking on debt. A survey of 2,700 users of buy now, pay later services like Clearpay, Klarna, Laybuy, Openpay and PayPal found more than half of 18-34-year-olds had signed up without realising, while 35 per cent went onto regret their debt-fuelled purchases. Two in five of those surveyed by Citizens Advice between January in February felt what they had signed up for was not 'proper' borrowing in the same way a credit card or loan was, and 42 per cent didn't fully understand what they were signing up for.
The research provides yet more scrutiny on the booming and increasingly controversial BNPL sector, which is bracing itself for regulation by the Treasury and the Financial Conduct Authority, which This is Money reported last weekend could be just weeks away. The sector allows for people to pay for goods after purchasing them or split them into smaller payments using often informal credit agreements. The so-called 'Klarna clampdown', named after one of the most well-known digital BNPL providers, will almost certainly cover the marketing of these services, and the affordability tests carried out before users checkout.

Source: This is Money