Buy Now Pay Later Problems: Your Rights with Klarna, Clearpay & More (UK)

Buy Now Pay Later (BNPL) — Klarna, Clearpay, Laybuy and others — makes spreading payments easy, but problems with refunds, late fees and disputes are common. Here is where you stand and how to sort it.

The regulation gap (and what protects you)

Most interest-free BNPL is not yet fully FCA-regulated (regulation is on the way), which means some protections you would get from a credit card do not automatically apply. In particular, Section 75 usually does not cover BNPL purchases. But you are not without rights:

• The underlying purchase is still covered by the Consumer Rights Act 2015 — faulty or misdescribed goods can be returned to the retailer.
• If you funded the BNPL with a debit or credit card, a chargeback may be possible.
• BNPL providers have complaints processes and many are signed up to dispute schemes.

Refunds: keep paying or pause?

The biggest BNPL trap: you return an item, but the BNPL plan keeps demanding payment until the retailer processes the refund. Tell the BNPL provider you have returned the goods and ask them to pause the plan while the refund is processed, so you are not chased or charged late fees for the retailer's delay.

Late fees and financial difficulty

If you are struggling to repay, contact the provider early. They should treat customers in financial difficulty fairly — pausing fees, agreeing a plan, and not piling on charges. Missed BNPL payments can increasingly affect your credit file, so do not ignore them.

A complaint letter template

Dear [BNPL provider],

Re: Agreement/order [number] — complaint

[I returned the item on [date] but the plan is still charging me / I was charged
late fees while awaiting a refund / the goods were faulty]. Please pause this plan
and stop any fees while the refund is processed, and refund any charges already
taken.

Please send your final response within eight weeks. If unresolved, I will refer
my complaint to the relevant dispute-resolution scheme.

Yours faithfully,
[Your name and contact details]

Treat BNPL like any other credit: get disputes in writing, push the retailer and the provider in parallel, and do not let a returned-item refund delay become your late fee.