Shoppers ‘unaware’ of buy now, pay later fees

Have you ever found yourself adding items to your cart, only to choose the buy now, pay later (BNPL) option without a second thought?

You're not alone. Recent research by the Lending Standards Board (LSB) shows that many are blissfully unaware of the hidden costs associated with BNPL products.

Repayment fees

Many households may now face unexpected repayment fees come January, after last year’s festive shopping.

A study by RFI Global found that:

• Only 52% of BNPL users are aware of late payment fees.
• Just 50% know how much these fees might be.
• 15% of users have been charged late fees, rising to 22% among those with poor credit scores.

Incoming regulation

While BNPL can offer a sense of control, many users aren't fully informed about it.

 This lack of awareness can lead to:

• impulse buying that sparks regret
• needing additional credit due to rising living costs

Over a third (36%) of BNPL users make their decision at checkout, and a whopping three-fifths don’t even realise these products won’t be regulated until 2026.

Regulation means shoppers benefit from greater protection, which we’ve welcomed after seeing a threefold rise in people seeking help for overwhelming BNPL debts.

Junelle’s story shows how easy it is to become trapped in a cycle of debt.

What changes will be made?

Regulating BNPL means: 

• customers must be made aware that BNPL is a form of debt 

• providers will need to carry out proper affordability checks 

• if things go wrong, people can get help from the ombudsman 

Bring in changes before 2026

We’re urging lenders to step up their game, even before regulations come into play.

Our director of external affairs Sebrina McCullough says: "The introduction of thorough affordability checks and essential consumer protections is a critical step that’s long overdue.

"Over the past year, we’ve witnessed a threefold rise in individuals seeking help with overwhelming BNPL debts, many of whom are vulnerable.

"We urge BNPL providers to collaborate swiftly with the FCA to implement these changes, ideally ahead of the proposed 2026 timeline.”

Check out our BNPL guide to make sure you’re fully aware of the pros and cons before clicking ‘buy’.

Do you need debt help?

If you’re worried about your BNPL debts getting on top of you or you’re behind on any other payments, we may be able to help with our free debt advice.