[Sing Tao Daily report]In recent years, banks or individual platforms have successively launched the emerging payment method “Buy Now, Pay Later” (also known as BNPL), advertised as “enjoy first, pay later”, and claim to provide interest-free Staging. However, the Consumer Council reminds that “there is no such thing as a free lunch in the world”, which will involve overdue repayment charges, and “buy now, pay later” is actually “use the future money first”, and consumers are prone to excessive consumption. According to statistics, from January to August 2021 and 2022 respectively, the Consumer Council received 9 and 18 complaints regarding “buy now, pay later”. The number of complaints received in the first eight months of this year is higher than that in the whole of last year. 1 times.
Set up deferred payment administrative fee account unfreezing fee
Most of the “buy now, pay later” platforms allow consumers to pay interest-free installments, but the payment period is usually shorter, usually 3 months. The Consumer Council reviewed the overdue payment terms and found that different platforms have different regulations, or involve various charges, such as administrative fees for deferred payment, account unfreezing fees, etc. The charges range from $50 to $300, or an annual interest rate. calculate. The interest-free installment of some platforms is limited to the first 3 months, and the handling fee for each subsequent month is 0.2% of the transaction amount. The terms of some platforms indicate that the platform may change the administrative fee at its own discretion without knowing the consumer. If consumers fail to pay in a timely manner, the resulting costs may not be low. The platform may even hand over the payment to a third-party collection agent to recover the arrears, and may refuse, suspend or terminate the consumer’s account for any reason at any time.
Low threshold and easy over consumption
“Buy now, pay later” is commonly used in online and small-value transactions. Consumers need to open an account on the “Buy Now, Pay Later” platform in advance, enter personal information, upload an identity certificate for authentication, and then bind a credit card or debit card issued in Hong Kong to shop at designated cooperative online stores or physical stores. The purchase amount will be paid by instalments within the specified time following picking up the goods. The general “buy now, pay later” platform does not require proof of income or inquiries regarding credit records, attracting consumers without a fixed income, such as freelance workers, students, housewives, and the unemployed to apply for services. Since the threshold for choosing “buy now, pay later” is quite low, if you use it for a long time, it may lead to a kind of dependence and unknowingly over-consumption. Once you are unable to repay the bill, you may have to pay fines for late payment, and even affect your credit record. .
In addition, the Council is concerned regarding the regulation of “buy now, pay later” instalment products offered by non-banks in the market, and urges “buy now, pay later” platforms provided by non-banks to apply for a money lender license from the Companies Registry. In addition, these platforms can also refer to the recent guidance issued by the HKMA to banks to implement consumer protection measures as soon as possible.
Complaints double
Citing figures, the Council said that from January to August 2021 and 2022, it received 9 and 18 complaints regarding “buy now, pay later”. The complaint involves the merchant’s failure to clearly explain the relationship with the “buy now, pay later” platform, and consumers may use the “buy now, pay later” platform to consume without knowing that the service is provided by a third party; in addition, the Consumer Council It was found that many “buy now, pay later” platforms operating in Hong Kong have their corporate headquarters overseas, and some platforms only provide email addresses for inquiries or complaints. Some consumers are unable to contact the relevant platform immediately following the account is frozen or when they want to cancel the transaction, or they only get a reply from the chatbot, and they cannot receive timely assistance, and it is difficult to get a refund. The rights and responsibilities of the platform and the merchant are also unclear, and it is easy to shirk each other’s responsibilities when there is a dispute, resulting in a lack of consumer protection.
In addition, the return and refund mechanism of “buy now, pay later” depends on the platform, which puts consumers in a very passive position and doubts consumer protection. For example, some platforms have stated that refunds will only be made following the merchants confirm and complete the return; and before the platform confirms, consumers must continue to complete the payment. In addition, requests for refunds and returns may be subject to approval by the platform.
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