Loans Bad Credit Online – Love Island stars ‘promoting buy now, pay later firms that lure young into debt’
Love Island stars are using their social media to promote “buy now, pay later” firms accused of luring young people into problem debt.
Amy Hart, Olivia Bowen, India Reynolds, Lucie Donlan and Belle Hassan have name-checked them in posts on Instagram.
They have plugged fast fashion brand Boohoo with the words “shop now pay later with Klarna”.
Millions use “buy now, pay later” services run by Klarna and rivals Clearpay and Laybuy to spread payments without paying interest.
Because there are no credit checks, experts believe shoppers are more likely to spend what they cannot afford.
Martin Lewis, of MoneySavingExpert.com, said: “There has been an explosion of buy now, pay later (BNPL) lending over the last few years, often targeted at young people, pushed via Instagram and social media, as if it is a form of lifestyle therapy.
“It isn’t. It’s debt. In fact, it’s the fastest-growing form of credit in the UK and regulation is crucial.”
Surveys show around 90% of transactions involve clothing and footwear, and 75% of users are under 36.
Shoppers’ debts can be passed to debt collectors and lead to black marks on credit ratings if they do not pay up.
Mr Lewis added: “BNPL isn’t as bad as payday lending – used right, it’s interest-free.
However, it’s been sold to retailers as an easy way to get people to spend more.”
Last week the Financial Conduct Authority announced a crackdown as its popularity surges in the pandemic.
The FCA will force providers to carry out affordability checks before lending and ensure customers are treated fairly.
The Government says it will legislate as soon as possible.
Financial campaigner Alice Tapper said: “It is reassuring that the FCA has identified the need for action.
“BNPL is often a teenager’s first encounter with credit. Shoppers as young as 18 are being advertised these products by influencers, with no-risk wording.”
Klarna has 10 million UK customers, with brands such as H&M, River Island, ASOS and Marks & Spencer offering it at checkout.
The company said: “We fully support modernising regulation and supervision.
“Consumers are choosing alternative payment methods and we expect the sector to continue growing. It is essential that regulation is fit for purpose, reflecting the digital nature of transactions and evolving consumer preferences.”
Amy Hart, 27, Olivia Bowen, 27, India Reynolds, 30, Lucie Donlan, 22, and Belle Hassan, 22, were contacted for comment.
Loans Bad Credit Online - Love Island stars 'promoting buy now, pay later firms that lure young into debt'
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