Martin Lewis has issued a plea to the government over "danger debt" rules ahead of the Autumn Statement on Wednesday. Citizens Advice, MoneySavingExpert.com (MSE) and Which? have teamed up again to renew calls for the Government to urgently protect buy now, pay later (BNPL) users.
Citizens Advice research has found that 37 per cent of UK adults have used BNPL in the last 12 months – up 37 per cent since 2021. One in six people using BNPL are behind on payments, and that figure rises to over one in three for those on Universal Credit, according to Citizens Advice.
ITV Good Morning Britain and This Morning star Mr Lewis, who has a BBC Sounds podcast, warned: "BNPL, used right, can be a decent way to spread the cost of planned purchases. Yet too often people sign up without realising it is a DEBT, what happens if they can’t pay, or take it on when it’s unaffordable.
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"Regulation was so close we could taste it – the Ts just needed crossing, and the Is dotted. Yet now we’re facing another Christmas, amidst a cost of living crisis, when people under financial pressure are tempted to borrow, and to spend, by this ubiquitous form of debt-payment.
"The industry says the credit laws are imperfect. They’re right. They’re imperfect for all other debts too – but they’re far better than nothing. And BNPL is a debt – it needs controls and regulation. Crucially, that’d ensure it’s promoted correctly, and would give people a legal right to go to the Ombudsman when it goes wrong.
"I’d welcome better rules, but they take time, so let’s get the current regulations in place, then all work together to make them better." Consumers who have used BNPL more than 10 times were over twice as likely as those who have not used BNPL to also have a high-cost credit product and almost twice as likely to have increased the amount of debt on credit products over the last year, research has found.
They are also over four times as likely to have missed a payment of a bill or credit commitment in three of the last six months.
