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Pay later customers being unfairly billed for returned goods

Emma Lunn
Written By:
Emma Lunn

Thousands of buy now pay later (BNPL) customers are paying for the mistakes of retailers and credit firms.

According to Resolver, borrowers are being pursued for BNPL debts incorrectly as a result of errors out of their control.

The complaints website has helped people sort out more than 17,500 complaints about BNPL credit in the past two years. One in 10 complaints relate specifically to issues with returned items, resulting in people potentially defaulting on credit deals unfairly.

Try before you buy

One of the most popular forms of BNPL credit involves ‘try before you buy’. This is where consumers buy clothes in different sizes to see if they fit, returning the ones that don’t before a deadline to avoid ‘buying’ them by default.

In theory, as long as you return the items within a set timeframe – usually 14 to 30 days – you shouldn’t be billed for the clothes.

But 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 items.

Many complaints are about the credit firm failing to address the complaint or situation when notified, with some borrowers being passed to debt collectors for relatively small amounts.

Resolver’s research found that some people being pursued for payments by credit firms despite items being both returned on time and confirmed by the retailers.

Others are being charged late payment fees for items by some credit firms or having their debts unfairly passed to debt collectors.

Resolver also found that some people were forced to pay for items in full or in instalments while waiting for complaints to be addressed. Some people who had paid struggled to get full refunds or were only given a portion of their cash back.

What the law says

Both the Consumer Rights Act and the 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 bought online under the Consumer Contract Regulations, even if there’s nothing wrong with them.

The law also states that 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 BNPL 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.”