Boohoo and Asos face stricter ‘buy now, pay later’ rules

by

Fast fashion websites face stricter ‘buy now, pay later’ rules to protect young shoppers

By Daily Mail City & Finance Reporter

Published: | Updated:

Boohoo and Asos were in the spotlight after the financial regulator vowed to crack down on buy now pay later providers.

The Financial Conduct Authority will regulate firms like Klarna, Clearpay and Laybuy which allow young shoppers to rack up big debts buying clothes from online fashion retailers with just a click of a button.

The payment method is viewed as dangerous and addictive as it allows customers to defer payments for up to 30 days, buying items on ‘the never-never’. 

Crackdown: The Financial Conduct Authority will now regulate firms like Klarna, Clearpay and Laybuy which allow young shoppers to rack up big debts buying clothes online

But the decision by the FCA also highlights the relationship between payment providers and the fast fashion industry, with websites like Boohoo and Asos using Klarna and its rivals to boost sales.

Boohoo advertises Klarna, Clearpay and Laybuy on its homepage alongside more reputable providers such as Mastercard and Visa. 

Boohoo’s boss John Lyttle has publicly backed Klarna on several occasions and in 2019 the two firms partnered.

Gareth Shaw, head of Money at Which?, said firms will now ‘need to be careful how they market debt products’.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.