Laybuy goes into administration: What does it mean for customers?

The buy now, pay later (BNPL) service has collapsed and customers can no longer pay for items using Laybuy.

BNPL provider Laybuy has gone into administration, affecting its 300,000 UK customers.

Laybuy’s customers had previously used the service to buy goods at stores and then pay for their order over 6 weekly instalments, without paying interest.

But New-Zealand based Laybuy has confirmed that while any customer orders already in the system will be processed, it has suspended new transactions for all its users globally.

What does Laybuy’s administration mean for UK customers?

No new customers can sign up to Laybuy and existing Laybuy customers can no longer use it to buy anything.

However, if you’re a Laybuy account holder, it’s absolutely crucial that you continue to make any repayments that you owe.

That’s because missing a payment could mean you’re charged a late fee and you could also damage your chances of getting credit with other lenders.

Laybuy’s late payment fee is £6 after a day and a further £6 every 7 days the payment is still missed, up to a cap of £24.

If your payment is more than 42 days late then Laybuy has said it may refer your case to a debt collection agency.

Your missed payment is also likely to be reported to Experian, which is a credit reference agency (CRA). Finder last year researched BNPL services and which CRAs they report to, along with the data they report – such as missed payments.

Experian – one of the UK’s 3 main CRAs – told Finder today that this late payment information would then be visible on your credit report to other lenders, although it won’t affect your credit score.

If you don’t have a great credit history, it’s worth considering whether a credit-building credit card could help.

About the author

Michelle Stevens is a deputy editor at Finder, specialising in banking, finance, credit and mortgages. She has a journalism degree from the University of Sheffield and has been a journalist for 15 years, writing on topics including fintech, payment systems and retail. Michelle was the editor of business publications FStech and Retail Systems, and prior to that was a senior writer at People Management magazine. She is often quoted in national media.

This article originally appeared on finder.com/uk and was syndicated by MediaFeed.org.