British shoppers have collectively racked up billions of pounds in debts via buy now, pay later (BNPL) credit arrangements over the course of this year.
Indeed, that latest research suggests that more than £4 billion worth of BNPL debt has been taken on by UK consumers during 2021.
Roughly 7.7 million people around the UK are believed to have accumulated debts with BNPL companies at an average of £538 per person.
The relevant figures have been compiled by the website and credit report provider Credit Karma, which has been taking a closer look at BNPL as a specific form of borrowing now widespread among consumers across the country.
The Financial Conduct Authority (FCA), which regulates all the UK’s financial markets, said earlier this year that the use of BNPL products “nearly quadrupled” during 2020 as many more people started using it as a form of credit during the pandemic.
Concerns have been expressed by the FCA and others about the potential for BNPL services to be harmful to consumers struggling with personal debts.
It is understood that BNPL options are proving particularly popular among younger generations of consumers and those whose finances are already stretched.
The consumer watchdog Which? has responded to Credit Karma’s recent research by noting that its own studies show that some consumers are “being bombarded” by BNPL schemes offered by some of the country’s leading retailers.
According to Gareth Shaw, head of money at Which?, these offers are often presented “with no information or warnings about the risks of late fees or getting into debt”.
“It’s very concerning to see such a huge amount of debt related to these schemes,” Mr Shaw has said.
“This demonstrates why there should be no further delay to plans for BNPL regulation, which should include much greater marketing transparency, information about the risks of missed payments and credit checks before consumers are cleared to use BNPL providers.”
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Unusually high rates of inflation are threatening to sweep many more Scots into problem debt situations and serious financial difficulties.
People with debt problems in Scotland are being urged not to struggle with their issues alone and to reach out for help and support if they need it.
Our Scottish based team can help advise you on your debt problems.