Along with Klarna, Clearpay is one of the largest Buy Now Pay Later (BNPL) providers in the United Kingdom. Adopted by an array of big, high-street brands, Clearpay offers users a way to spread the cost of their shopping payments interest free, with users predominantly using this BNPL platform for fashion and beauty purchases.
However, as the cost of living crisis has continued to stretch household finances to the limit, there has been an increasing number of consumers using Clearpay for purchases such as groceries, or other household essentials. As such, more and more people are falling into debt with Clearpay.
Clearpay works by offering consumers the option to pay at millions of brands in four interest-free instalments over six weeks. On the surface this may seem like low-risk lending; however, as with other forms of borrowing, Buy Now Pay Later is far from risk free.
While Clearpay does not charge interest, it does charge late payment fees. Users could face a £6 late fee for each late instalment, and a further £6 if it’s still unpaid seven days later. Alternatively, if orders are over £24 then users could face late fees of 25% of the order value. These late fees can soon add up and lead to unaffordable Clearpay debts. Meanwhile, Clearpay may pass unpaid debt to a debt collection agency.
It is also worth noting that Clearpay is not regulated by the Financial Conduct Authority (FCA). However, they have been known to work closely with the FCA in the past and change their contracts following their advice.
It is clearly important to keep on top of Clearpay payments in order to prevent late fees. However, in all cases, keeping on top of your priority bills should take precedence. Priority bills are classed as services that could make you homeless, or take away your essential services, if left unpaid.
The first thing you should do if you are in debt to Clearpay or have fallen behind with your Clearpay repayments is contact them directly. The BNPL provider has a hardship policy that works with consumers to get them back on track. It is important to do this as soon as possible to avoid late fees mounting up, or debt collection agencies being contacted.
As soon as you miss a payment to Clearpay they will stop you making any more purchases via Clearpay in a bid to prevent customer debts spiralling.
However, if you consistently miss payments and do not contact Clearpay to declare your financial difficulties, they may transfer your debts to a debt collection agency to recover the amount owed.
In the last three months, 15.90% of people who sought out debt advice from us listed BNPL as a type of debt. While this does highlight the prominence of Clearpay in the UK financial landscape, it also shows that if you are facing Clearpay debt, you are not alone.
We offer confidential, no-obligation debt advice any time, day, or night via our online debt advice tool. Or if you would prefer to speak with one of our expert debt advisors, you can call us on 01925 599400 or email firstname.lastname@example.org.