Consumer Protection Issues with Buy Now, Pay Later

Omar Ha-Redeye was interviewed in The Globe on Returning online orders is already a nuisance. Buy now, pay later plans can make it worse,

Digital buy now, pay later services may make it easier to click “buy” when you’re shopping online. But when it comes to returns and refunds, using a BNPL lender can add a layer of complexity to the process of getting your money back.

“When we’re online shopping, sometimes what we receive at our doors is a bit of a surprise,” said Omar Ha-Redeye, a lawyer at Toronto-based Fleet Street Law. “When using buy now, pay later plans, the challenges with dealing with a return or a refund might be the bigger surprise out of the two.”

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Returns, while costly for merchants, are also a nuisance for consumers. Often they come with only a partial refund, shipping costs and unwelcome trips to the post office. But using a BNPL provider can add to the pain, Mr. Ha-Redeye said.

With some lenders, consumers may have to temporarily keep making payments as set out in their BNPL agreements even after they’ve returned what they bought.