'Untrustworthy' BNPL services pounded by customers

The consumer stampede for buy now pay later services might have already raised more than a few eyebrows, fuelled by concerns over affordability, but fresh evidence has emerged that even those who have signed up are not too chuffed with providers either.

According to a new study, only a third of UK consumers trust BNPL services to protect their data, and a similar number (35%) say they don’t believe providers will protect them from fraud while 20% say they now worry about paying for things online.

The research also reveals one in eight shoppers has experienced fraud with BNPL services, with 21% saying they signed up to a fake BNPL service, while 20% say their account was hacked.

The study, carried out by Callsign, goes on to show that when it comes to the type of fraud experienced after using a BNPL service, 30% say a fake account was set up using personal credentials, while 28% say they gave away personal data to a scam service.

In fact, 52% of consumers said they don’t trust that BNPL services will prevent them from falling into debt.
In addition, after experiencing fraud through BNPL, 21% stated they no longer use those services, and 28% don’t use the retailer where they purchased the goods.

However, 44% said they would be more likely to use BNPL if it was provided by their bank compared to another provider while 46% say that BNPL providers should be responsible in protecting them from fraud.

Callsign chief commercial officer Amir Nooriala said: “BNPL provides a great opportunity for users to gain additional time to pay off their purchases, but the ever-increasing rate of fraud is raising the risk of using the service.

“Businesses need to respond accordingly and quickly to the high-risk of fraud using BNPL to maintain trust and keep their reputations intact.

“For banks and other financial institutions that provide BNPL services, this starts with building digital trust.”