'A debt spiral': The risks of buy now, pay later services

Buy now, pay later services may have made buying products easier for consumers, but with their increasing popularity and almost ubiquitous presence, concerns are growing that some users may get caught in a debt spiral.

In 2018-19, buy now, pay later providers earned $43 million in revenue from late payment charges. Source: Getty Images

Highlights

• Buy now pay later services are unregulated in Australia, which gives the consumer fewer rights if something goes wrong.
• According to an ASIC report, 21 per cent of buy now pay later consumers missed repayments in the preceding 12 months and incurred late fees.
• Over half of all buy now pay later users made multiple purchases using the service.

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