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Buy now, pay later: your rights over refunds as Missguided collapses

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Buy now, pay later (BNPL) firms have pledged to refund shoppers affected by the collapse of the fast-fashion retailer Missguided.The online clothing brand entered administration on 30 May owing suppliers millions of pounds and leaving customers in the dark about orders and refunds.Administrators from Teneo are in charge until Frasers Group, the retail empire owned by the Sports Direct founder, Mike Ashley, takes over in August after a £20m deal.The site’s low prices – it hit the headlines in 2019 for selling £1 bikinis – and BNPL options meant it was popular with shoppers who wanted to try on outfits at home before returning unwanted clothes.BNPL allows shoppers to buy items and either pay for them in monthly or weekly instalments or delay settling the total balance for 30 days.Missguided is not paying refunds, even for items that have already been returned, and customers have been told they are likely to get a “small fraction” of what they are owed from the administration process.

Teneo has not responded to requests for comment.Martyn James, the head of media at the complaints website Resolver, says: “Because businesses like Missguided are online, their business model – one of ordering clothes to try to then processing returns – leaves consumers exposed to big losses if the firm goes bust.”However, big BNPL firms have confirmed that many of their customers will get their money back and have future payments cancelled.While that is good news for shoppers, the unregulated sector has faced criticism for allowing customers to build up debt and for lax affordability checks, and should only be used by shoppers who can keep up with the repayments.Citizens Advice research, published this month, found that more than two in five

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