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In honor of my Caught Dead in Wyoming mystery series, my assistant Kay Coyte is writing for my newsletter and blog a series of consumer tips inspired by TV reporter Elizabeth Danniher.

In a previous Consumer Tip, the Federal Trade Commission had issued an alert about buy now, pay later (BNPL) deals. The concern was that Christmas shoppers might spend more than they could reasonably pay off, leading to unexpected fees or other charges. Returning an item is complicated, since they’re not dealing with the seller directly and consumers have been surprised to learn they must keep paying for the returned item until the store and third-party vendor are happy with the transaction. As stated before, buyers could be giving up other consumer protections that come with credit card purchases.

Since the holidays, CBS News has reported on the issue and discovered some buyer remorse. The federal Consumer Financial Protection Bureau (CFPB) has stepped up its investigation into complaints and is calling for increased industry oversight, similar to regulation of credit cards. The CFPB also created an explainer YouTube video on the subject.
In response to the CBS report, a trade group that represents financial tech firms such as PayPal, Afterpay and Zip, said in a statement that most people pay off their loans and lenders “work with consumers who miss a payment to get back on track.”
But the problem is, younger consumers — many of whom know the dangers of credit card debt — are embracing the BNPL concept and using it for everyday purchases, including Uber Eats/DoorDash for dinners, Instacart for groceries and big box stores such as Sam’s Club and Costco for just about anything. But are they keeping track of all those scattershot payments? Do they know what they’re getting into?
In a recent promotion for Zip, the fine print included: “For a $200 purchase, you’d make four $51.50 payments every two weeks starting today for a 52.18% annual percentage rate and a total of payments of $206. … A $6 installment fee is charged at commencement – you pay $1.50 of this fee as a prepaid finance charge when you make your initial payment today. The remaining $4.50 is included in your future payments.”
To some, a BNPL deal seems like free money. But as the young woman CBS interviewed says, with the wisdom of hindsight: “Just resist it because it does end up catching up to you. You have to remember not to get [your] future self into trouble.”