Martin Lewis calls for regulation of buy now, pay later

Money expert Martin Lewis has urged the government to regulate ‘buy now, pay later’ companies.

At a virtual House of Commons Select Committee meeting, Lewis said that these schemes were “absolutely the fastest growing form of credit in the country.”

He claimed that buy now, pay later businesses were targeting under thirties.

“And if you’ll forgive, me most policy makers are not under 30, and it’s gone under the radar,” he said.

The money saving expert added: “Advertising is done by influencers on Instagram, where they are pushing the feelgood hashtag Klarna. That is fundamentally inappropriate for a credit product.”

Klarna’s direct to consumer app, which enables users to shop at any store or brand online with instalment payment options, now has more than 12 million monthly active users worldwide, with 55,000 daily downloads.

“My issue is that, just like with payday loans, it will be too late. It is unregulated, without controls both in product design and communications. When people have a problem – and often it actually works pretty well – there is no ombudsman you can go to, because it is unregulated. I would call for maximum speed to move this into the regulatory environment,” he added.

Retail Systems has reached out to Klarna for a response to Lewis’ comments.

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