The fine print behind buy now, pay later | Consumer Reports

Buy now, pay later options can be found everywhere these days — available at checkout retailers like Amazon and Walmart, and even at restaurants and grocery stores.

With so many buy now, pay later apps sprouting up, we’re taking a look at the security concerns and risks of 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,” Consumer Reports Investigative Reporter Lisa Gill said.

CR 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.

CR 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 CR’s privacy control tests, and there’s more.

“Our results found some troubling issues — like not all of them clearly disclose loan fees,” Gill said.

To help if you do get hit with hidden fees, CR says to be sure to take screenshots of each loan term page before you hit “accept.”

This could help if you need customer service in the future.

CR says 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,” Gill said.

If you can’t pay on time, notify the company in advance because you may be able to reschedule a payment.

About the Authors:

Lauren Helkowski joined WSLS 10’s digital team in August 2022, but has held a passion for storytelling long before.