Mum warns of the risks of Afterpay after being stung by repayments
Consumer protection agencies are urging shoppers to beware of credit services such as Afterpay, with fears they could be costing customers more than they think.
From flights to food, homewares and clothing, no interest services like Afterpay and Certegy Ezi-Pay allow people to have the products now and pay them off later without being charged interest.
But the Consumer Credit Law Centre said customers need to read the fine print when signing up for any no interest payment services.
“In some cases the default charges can be quite significant,” Belinda Lambert told 9NEWS.
She said some services also charge establishment fees, and customers may end up paying more than the product is worth.
“Sometimes the cost of credit is built into the cost of the transaction so the consumer is paying for the credit but its hidden,” Ms Lambert added.
One South Australian that knows all about the dangers is mother Brianna Burns, who struggled with repayments after using Afterpay to purchase her children's Christmas presents.
“I had the maximum amount that you can have on there, so just trying to manage those installments got a little bit stressful,” Ms Burns said.
“The payment that was due was around the middle of January and that was for $14 and then by the time we got it paid off in the middle of February it was at $50."
No interest payment services are currently not regulated but consumer advocates believe they should be subject to the same rules as lenders and brokers.