Buy now pay later customers paying for retailers and creditor firms mistakes

6th April 2021

New research by Resolver has found that thousands of people are being penalised or pursued for buy now, pay later (BNPL) debts incorrectly, as a direct result of errors by retailers and credit companies.

Resolver says that it has helped people sort out more than 17,500 complaints about buy now, pay later credit in the last two years. Yet one in ten relate specifically to issues to do with returned items, resulting in people potentially defaulting on credit deals unfairly.

One of the most popular forms of BNPL credit involves ‘try before you buy’ – where consumers try clothes to see if they fit, returning the ones that don’t before a deadline to avoid ‘buying’ them by default. As long as you return the items within a set timeframe – usually 14 to 30 days, depending on the retailer – you should not be billed for the clothes.

Yet Resolver’s users are increasingly reporting that due to returns not being logged properly or lags between the retailer and credit firm communicating, they are still being billed for the returned goods. Many complaints are about the credit firm failing to address the complaint or situation when notified, with some people being passed to debt collectors for relatively small amounts.

The research found:

  • People being pursued for payments by the credit firms despite items being both returned on time and confirmed by the retailers.
  • Others being charged late payment fees for items by some credit firms or being locked out of others and passed to debt collectors.
  • Some people were forced to pay for items in full or in instalments while waiting for complaints to be addressed.
  • People who had paid struggling to get full refunds or only being given a portion of their cash back.

The Consumer Rights Act and Consumer Contract Regulations provide statutory rights when it comes to returning goods, without the need to take credit out. The laws say:

  • You have 14 days to return (most) goods under the Consumer Contract Regulations even if there’s nothing wrong with them, as long as you bought online.
  • You have up to 30 days to return goods bought anywhere if they are broken, damaged or not as advertised.

Resolver’s CEO, Alex Neill, said “Getting a refund for returned goods should be pretty simple – but using buy now, pay later credit to pay for the goods makes it a fiendishly complicated process. Increasing numbers of people are being asked for payment or penalised for late payments for goods they don’t even have anymore.”

“It’s too easy for retailers and credit companies to blame each other when things go wrong – and our users are making it clear that they are struggling to get errors corrected when they contact the firms. Both credit firms and retailers need to act now to stop people paying unfairly for their errors.”