Online shopping is on the rise and is becoming more and more convenient in the current COVID restrictions. Looking for a new outfit, furniture, an electronic device and much more while sitting on our couch has never been so easy.

Brands are surfing on this trend and are trying to make your shopping experience as easy as possible, including the way you’ll pay for their products. This has led to the creation of the “buy now, pay later” payment method.

What’s the “buy now, pay later” service?

Several apps in the UK currently offer “buy now, pay later” services which allows online shoppers to purchase an item and pay for it over a certain amount of time. Currently, some of the big fashion retailers including New Look, H&M and Asos offer these services as a flexible payment method at online checkouts.

These apps include:

• Klarna whose customers have the freedom to pay in full up to 30 days later or split the cost into up to 3 monthly payments.
• Clearpay whose users benefit from a fast sign up and the option to pay for their purchase by splitting the cost into up to 4 payments.
• Laybuy with which online shoppers can spread the total cost of their purchase over 6 weekly payments.

In order to use these services, users are required to create an account that often doesn’t require a lot of information. These services aren’t regulated at the moment, but the Financial Conduct Authority (FCA) has announced early this year that they will soon face stricter rules, much like traditional forms of payment.

How does the “buy now, pay later” scam work?

Unfortunately, this payment method has become a new opportunity for criminals to steal money and information from innocent buyers.

Fraudsters can easily sign up for the pay later service using their victim’s identity. This is a dangerous scam, as they could use your personal information to purchase many items and make sure you will be charged for each of them.

One story recently reported saw a 26-year woman receiving a Topshop parcel although she hadn’t done any clothes shopping online recently. The parcel included a dress which wasn’t in her size, and an unexpected £30 bill from Klarna, although the victim had never used Klarna services before. This was a “buy now, pay later” scam and it was confirmed she was a victim of identity fraud.

How can I avoid falling for this scam? The golden rules.

• Keep your personal information safe.
• Don’t overshare your personal details and shopping habits on social media.
• Keep an eye on your bank and credit card statements and make sure you’re only paying for an item you’ve actually ordered.

What should I do if I’m the victim of a “buy now, pay later” scam?

• Contact the “buy now, pay later” company involved to request to shut down the fraudulent account created by using your identity.
• Contact your bank if you’ve already mistakenly paid for an item you didn’t purchase.
• Report the scam to Action Fraud by calling 0300 123 2040 to prevent it from happening again.

Stay safe!