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Teens are ignoring the risks of 'buy now, pay later'

Lockdown has forced our entire lives online, from our banking to our shopping. But, as a Telegraph Money investigation revealed this week, this digital convenience comes with its own perils.
Millennials have been flocking to online shopping sites during lockdown, with many funding their purchases using credit schemes known as “buy now, pay later”. Experts are worried they may tempt users into building up huge debts they cannot pay off.
Even more concerningly, a loophole in the security system of Klarna, one of the biggest providers, has been allowing teenagers to go on “free” shopping sprees – which is illegal, as they are too young to qualify for credit. Our consumer champion Katie Morley spoke to the mother of a 16-year-old girl who was able to open an account on the website and rack up debts of more than 500 through buying clothes online.
Although the minimum age to open a Klarna account is 18, the girl managed to fool its credit check system by using her own name but her mother’s date of birth. Her mother was asked to pay the bill in full or report her own daughter to the police for fraud. After intervention by Telegraph Money, Klarna agreed to close this alarming security flaw and waived the 500 debt.
The popularity of these “buy now, pay later” schemes has been growing rapidly. Klarna now has seven million British customers and it is far from the only one to have dangerous security flaws exposed. Afterpay, an Australian provider that operates as Clearpay in Britain, came under fire after reports that teenagers had misused it to spend hundreds of dollars on alcohol.
Adults have not been immune to the effects of the move online during Covid-19 either. The number of people falling victim to coronavirus scams has continued to spike. Victims have lost more than 8m in total after being targeted by everything from fake tax rebates to dodgy face mask sellers. You can find our guide on how to spot a scam here.
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In our comments section, David Davies said of ‘Klarna let my underage daughter go on a 500 credit shopping spree at Asos’: "I am disappointed that the police will not be investigating this. In the near future this girl could be employed in a position with access to other people's money, a position she is clearly not suitable for. Some people believe that these types of crimes are "victimless". This is not the case, the company has to recover that money by some means, probably by increased prices or reduced dividends."
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