Buy Now, Pay Later plans are offered everywhere -- from online retailers like Amazon and Walmart to restaurants and grocery stores. Since we’re all finding ways to make ends meet -- stretching our paychecks as much as possible -- this may be something you’re considering. So, Consumer Reports wanted to know: how secure are Buy Now Pay Later apps and are there risks in using them?
With just a few clicks on your phone, you can make a big or small purchase with no interest or fees and divide the cost into four payments over several weeks or months.
Sounds great, which might explain why Buy Now, Pay Later apps are growing in popularity. In a recent Consumer Reports survey, 21% of Americans said they had used Buy Now, Pay Later at least once.
But not surprisingly, there’s some important fine print you need to be aware of.
“There are questions about these loans’ lack of critical consumer protections. So, we tested some of them to check how safe they really are for consumers,” explained Consumer Reports Investigative Reporter Lisa Gill.
Consumer Reports recently analyzed eight popular Buy Now, Pay Later apps for safety, privacy, and transparency.
Coming out on top: PayPal scoring 89 out of 100, earning high marks in fraud protection and offering good security practices.
RELATED: Keeping You Safe When You Buy Or Sell Online
Gill says some other apps leave a lot to be desired. Perpay and Zilch pulled up the rear with scores of 69 and 70, performing poorly in Consumer Reports’ privacy control tests. And there’s more: Gill says the results show some troubling issues, like not all of them clearly disclose loan fees.
To help if you do get hit with hidden fees, Gill recommends you take screenshots of each loan term page before you hit “accept.” This could help if you need customer service in the future.
Gill warns fraud and identity theft are also concerns when using these apps.
“You should make it a habit to regularly check your Buy Now, Pay Later account to monitor for fraudulent charges, and to review all transactions and email notifications from your provider,” she said.
If you can’t pay on time, Gill says you need to notify the company ahead of time because you may be able to reschedule a payment.
If you do run into problems using a Buy Now, Pay Later app -- and working with customer service leads to dead ends -- Gill recommends contacting the Consumer Financial Protection Bureau.