Most “buy now, pay later” loans are not being reported to credit bureaus and a new report warns this could lead to bank-loan delinquencies and chronic overborrowing by consumers.
They’re typically offered on an interest-free basis and they fill a need for many consumers. In Canada, BNPL payment is expected to increase by 20 per cent this year to reach $9.6 billion , according to a survey by market research company Research and Markets. “The need to appropriately risk-measure these kinds of products is pretty critical to making sure that personal debt levels for Canadians stay manageable,”
That could include monitoring and cracking down on misleading practices as well as giving credit providers more visibility into customers’ ability to pay back their loans, she said. “Equifax has recently begun accepting data from BNPL providers, and we are actively working with other providers in Canada to increase coverage,” the company said in an email.