Warning over retailers that use buy now, pay later firms putting shoppers at risk of losing cash for faulty items

SHOPPERS are being warned that online retailers that use trusted payment services, such as buy now, pay later schemes, put them at risk of losing money for unwanted or faulty items.

Consumer group Which? is urging customers to read retailers' returns policies before parting with their cash.

More than 170 retailers that use buy now, pay later schemes listed on the Klarna, Clearpay and Laybuy websites have incorrect return or faulty goods policies on their sites, the group found.

The same retailers also offered other trusted payment methods, such as Apple Pay, Amazon Pay and Google Pay.

Which? is warning that customers could end up spending cash on unreliable websites because they allow payment through the popular payment schemes.

Many of the sites Which? looked at refused refunds on full-priced, non-faulty or sale items, and offered customers store credit or exchanges instead.

Your rights if you have a faulty product

HERE are some tips from Which? for getting a complaint dealt with.

  • Act quickly: You have 30 days from taking physical ownership of the goods to claim a refund for if it's faulty; after this time you may be offered a repair or replacement.
  • What to do first: Write to the customer-services department politely and objectively, so you have a written record as evidence. Then escalate it if you're not happy with the response.
  • Quote the relevant laws: The date you made the purchase determines which legislation applies.
    If you bought your goods any time from 1 October 2015, then the Consumer Rights Act applies.
    If you bought your goods on or before 30 September 2015, then the Sale of Goods Act will apply.
  • Be clear about what you want:Say what you want to happen – refund, explanation or apology.
    It's worth noting that if you've owned the item for less than six months, the retailer must give you a full refund if an attempt at a repair or replacement is unsuccessful.
    If a fault develops after the first six months, the burden is on you to prove that the product was faulty at the time the goods were delivered to you.
  • Be firm: Say what you will do if not satisfied with the response, such as going to the relevant ombudsman or small claims court.

Some retailers' policies gave shoppers fewer than 14 days to return unwanted goods, while others charged up to 20% "restocking" or "administration" fees for sending an item back.

This is against the Consumer Contracts Regulations, which gives consumers the right to cancel orders bought online within 14 days of receiving them.

Under the rules, shoppers can't be charged to make a return either.

Up to 36 of the sites had incorrect or misleading faulty goods policies that could leave shoppers with broken items.

For example, some wanted customers to report defects within a few days, despite the Consumer Rights Act stating there is a 30 day window to report a fault.

Which? warns that customers who used the buy now, pay later schemes with these types of websites may end up having to continue to pay for broken goods because they owe the payments company cash.

Overall, the research found that 95 stores didn't offer refunds on sale items, while 74 failed to give shoppers the correct minimum length of time to return goods.

Seventeen retailers wrongly failed to offer refunds at all and 16 even charged fees to returns.

Plus, the buy now, pay later schemes are also not protected in the same way debit and credit cards are, though Chargeback schemes and Section 75.

Consumer rights expert Adam French at Which? said: "Many consumers could be lulled into a false sense of security by the convenience and familiarity of buy now, pay later.

"Online shoppers must not assume that a retailer is reliable just because it offers buy now, pay later at the checkout."

Which? is now writing to all 170 retailers to urge them to change their policies in line with UK consumer law.

The consumer group is calling for these types of payment schemes to be regulated to better protect shoppers.

How to cut the cost of your debt

IF you’re in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.

Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money

Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs

Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker

Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)

Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them

Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay

Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further

Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans

The regulator launched a review in September of unsecured credit, including "buy now, pay later" firms.

Around one in 10 buy now, pay later users told Which? they have incurred late charges when paying this way.

The group's call comes after consumer champion Martin Lewis told the Treasury Committee in December that there has been an "explosion" of buy now, pay later schemes, many of which are aimed at younger adults.

Adam added: "Given that many people’s finances are stretched now more than ever, we believe that the FCA needs to regulate the BNPL market to ensure there are more protections in place for consumers to avoid these costly situations."

Laybuy told The Sun that "customers ensure they are happy with a merchant’s own terms and conditions before purchasing from them".

It added: "We are disappointed to hear that some customers have had a negative experience with a small number of retailers that offer Laybuy as a payment option."

Clearpay told Which? it carries out regular reviews of merchant policies to make sure they comply with consumer law and added that it can terminate agreements if they don't.

Klarna said it supports regulation of the sector and that it makes sure merchants follow its terms and conditions, including its ethical guidelines policy.

A spokesperson told the Sun "We carefully review merchants before they are approved to use our services.

"If we identify that a merchant is no longer operating to our required standards or detect any suspicious activity, we take immediate action.

"Consumers who are concerned about a purchase can easily raise a dispute in the Klarna app which will pause the payment while the dispute is resolved.

"We… have been asking for thorough regulation of the sector."

Amazon said it guarantees purchases made with Amazon Pay through third party websites so customers can "buy with confidence".

Google told Which? that it takes action against anyone who failes to adhere to Google Pay's terms of service.

Apple said: "Apple Pay customers are covered by exactly the same benefits and protections offered by the card they are using to make the payment."

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