Families hit by the cost-of-living crisis are being targeted by credit firms offering “buy now, pay later” deals on weekly groceries, pet food and hot drinks.
Shoppers are urged to spread their payments for staple foods and treats to help cope with “these difficult times”. One promotion states: “Regardless of your credit rating, we will offer you a tonne of credit to do your shopping with.”
The sector faces new regulation, but welfare groups warn the new form of credit is “like a runaway train”. The products typically offer interest-free credit with the money paid in three or four instalments over a month or longer.
Klarna, the biggest player in the buy now, pay later sector, has focused on partnership deals with retailers selling fashion and household items, but some operators are promoting credit on groceries, fast food and hot drinks.
An investigation by the Observer has found:
The tech finance firm Zilch, valued at £1.5bn, is advertising a buy now, pay later deal with superstore Iceland, with ready meals, pet food and fizzy drinks on offer with a first payment of 25% of the shelf price, and the balance paid interest-free over six weeks. The firm also promotes home-delivered food and coffees on interest-free credit.
An online grocery store called Flava is offering buy now, pay later credit to struggling families without credit checks for products from Kellogg’s Coco Pops to Pot Noodle. Its website states: “Stop worrying about how you are going to survive the lockdown.”
Clearpay, one of the biggest buy now, pay later operators, promotes vodka and gin retailers and online sweets stores on its website, where the products can be bought on interest-free credit over six weeks.
Mehmet Sezgin, a former board member of MasterCard
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