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New research reveals the best cities in the UK for independent retailers.

4 Mar 2024

Research by global fintech company SumUp has revealed the best cities in the UK for independent businesses.
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Rising costs continue to impact hair and beauty sector

21 Feb 2024

The latest quarterly State of the Industry survey from the National Hair & Beauty Federation (NHBF) shows that the recovery of the sector was slow and steady through 2023 and into January... Read more…

UK votes for its favourite pun-based shop name

21 Feb 2024

The UK has voted for its favourite pun-based shop name, and 'Sew It Seams' - a clothing alteration store in Belfast - has been awarded the top spot. 
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Town centre shops praise council for initiatives

21 Feb 2024

Businesses in the Devon town of Ottery St Mary have praised their local council for initiatives designed to help support them and boost trade.
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Three UK indie coffee shops named among the most popular in the world.

19 Feb 2024

A new ranking of the most popular independent coffee shops in the world has put three UK cafes in the top 10.
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Age-friendly businesses could revitalise Britain's high streets.

19 Feb 2024

Older people could be the financial shot in the arm needed for Britain’s high street, according to research commissioned by the University of Stirling. 
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Rural shops more important than ever, new report shows.

8 Feb 2024

The ACS (the Association of Convenience Stores) has celebrated the crucial role that rural shops play in thousands of communities across the UK in its 2024 Rural Shop Report.
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Study reveals Apple Pay and contactless payments have overtaken cash payments as favourite ways to pay in-store.

8 Feb 2024

New research reveals that Apple Pay and contactless payments have overtaken cash payments by a landslide as our favourite ways to pay in-store.
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Fed expresses alarm at ‘runaway’ shoplifting incidents.

5 Feb 2024

The Federation of Independent Retailers (the Fed) has expressed alarm at new figures that show shoplifting at its highest level in 20 years.
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Hunstanton deli launches new West Norfolk food and drink festival.

5 Feb 2024

A brand-new festival is being launched next month is “all about community and breathing life into the High Street”, according to Mark Kacary, managing director of The Norfolk Deli in... Read more…

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Buy Now Pay Later firm misleads customer and negatively affects credit score

Posted on in Business News, Cycles News

Following on from the ACT mini-series, Choosing the right finance provider, avoid the pitfalls, a recent story published on BBC news shows how a popular finance provider misled a 21-year-old student which ended in her credit score nearly halving.

Erin Phillips considers herself well organised with monthly payments set up to pay off credit card bills and her car automatically. However, when using a retail finance firm that has a popular buy now pay later option to buy clothes online, try them on, and pay 30 days later, she found herself to be improperly informed in terms of payments.

She had missed a few payments without realising that this could negatively affect her credit score, which banks and credit card companies use to decide whether or not to lend to people. Upon missing the first payment, Ms Phillips received a letter like this from the company:

 

The student says that the email was not very informative and that if she had known the purchases made through the retail finance firm could affect her so much then she would not have used it.

'Misleading ads'

Multiple debt charities, including Stepchange, the Money Advice Trust, the Debt Support Trust and Christians Against Poverty, are calling on buy now pay later firms to be better at explaining risks to customers' finances in their adverts.

Stuart Carmichael, chief executive of the Debt Support Trust, described some buy now pay later adverts as "misleading".

The firm that affected Erin Phillips has a popular product called "Pay later", whereby customers have 14 or 30 days to pay off shopping they've bought online, with no added interest. For customers using this service, unpaid bills can be marked on their credit score and passed to a debt collection agency. These details were not included in the company's recent advertising campaign.

'Popular with young people' 

The firm partners with many companies that are popular with young people including Asos, H&M and Topshop. It also uses Instagram influencers and Love Island contestants that again have a young following. There are concerns that young people might be encouraged to take on debt using this company just to afford some new make-up, or a dress for a night out.

According to the BBC, under-25s made up 14% of those seeking help from the charity Stepchange in 2018, with an average outstanding debt of more than £6,000.

Sarah Pennells, editor of the consumer finance website Savvy Woman says "The whole point of retailers signing up with Klarna or companies like this is that people buy more. And some of those people probably shouldn't be buying more".

The advice given by Ms Pennells is "If you're thinking of using buy now, pay later, ask yourself if you'd still buy the item if you didn't have this option".

Find out more

Read the full BBC story here, which includes information on where those struggling with debt can find advice.

It may also be worth having a recap on the ‘Avoid the pitfalls' mini-series the ACT published in April 2019 which answered the trade's questions about selecting the most suitable retail finance provider. Key topics examined were why low rates can equal lost sales, the importance of checking the finer details of your agreement and why you should identify who actually lends the money when selecting your provider.

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C 2 Zero Limited t/a ActSmart & Ride it away is authorised and regulated by the Financial Conduct Authority 657829.

 

 

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