NASHVILLE, Tenn. (WTVF) — 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 percent 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," said Consumer Reports Investigative Reporter Lisa Gill. "So, we tested some of them, to check how safe they really are for consumers.”
Consumer Reports 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.
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!
“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, Consumer Reports 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.
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 added.
And if you can’t pay on time, notify the company ahead of time because you may be able to reschedule a payment.
