Buy now, pay later company Laybuy has gone into administration. It is the first “buy now, pay later” company to collapse.
A notice on Laybuy’s website reads: “payment services are currently suspended in all regions. This affects our customers’ ability to place new orders online and in-store.
“During this time, all existing orders will be processed as usual. We will share more information as soon as we can.”
Shoppers can also be referred to a debt collection agency if you are more than 42 days in arrears, with Laybuy also reporting the data to Experian. So if you miss a payment it would appear on your credit report, the Mirror reports.
Laybuy disabled its website in mid-June, but now the news of its collapse has been confirmed. FTI Consulting is said to handle its administration process.
Sam Ballinger, joint administrator at FTI Consulting, said: “The joint administrators are currently evaluating the options available to the businesses and supporting employees, merchants and other affected stakeholders through this difficult period. Laybuy is not currently accepting new transactions, but customers should continue to make payments as usual.”
What does this mean for users?
According to Raisin UK data, around 484,000 UK customers are believed to be affected by the administration – the first of its kind for ‘buy now, pay later’. The lender had disabled its website and app, with customers unable to create accounts or receive/make payments.
“Currently the administrators are not accepting any new transactions for Laybuy, but it is important that customers continue to make their refunds as usual,” he said.
“The administrators will be actively working to explore options as to whether a sale of the business can be achieved, in which case your debt would be resold and transactions would need to continue as normal as you are expected to have made all your payments.
“This news will be hugely frustrating for their customers worldwide and will be worrying news for the thousands of UK users who have used Laybuy to shop from leading retailers such as Amazon, Marks & Spencer and Next.
“It will also further increase the demands on Buy-Now-Pay-Later platforms to face better regulation to protect customers should another provider collapse in the future. With BNPL platforms continuing to contribute to credit scores, this uncertainty will cause significant concern for its users.”
Non-payments will still incur late fees, while payments more than 42 days in arrears may be referred to a debt collection agency. You will not be able to reopen a closed account.
