Nearly a quarter of Londoners have turned to buy now, pay later services as the cost of living crisis and inflation continue to bite, a charity has revealed.
The Centre for Financial Capability has warned of the risk of using "wild west" credit services such as Klarna and Laybuy, as 34 per cent of Londoners who use the payment schemes fork out for late fees.
Other buy now, pay later services also include Clearpay and PayPal Credit.
Polling by the charity reveals 23 per cent of Londoners have turned to buy now, pay later services because of high rates of inflation and the cost of living.
A third of Londoners have used buy now, pay later services in the past, the charity explained.
Buy now, pay later schemes allow customers to pay for their shopping using weekly or monthly installments, rather than the full amount upfront.
They can be a way for people to spread the cost of their purchases, interest-free.
But concerns have previously been raised that some people could end up taking on too much debt, which could end up being difficult and costly to pay off.
The Centre for Financial Capability has also warned that users are not fully aware of high hidden charges or the risks of using the payment method.
Some 26 per cent of Londoners who have used the services are unclear what the late payment fees would be if they missed a repayment.
More than a third of Londoners using the services, 39 per cent, have missed one or more repayments in the last six months.
Of those, 34 per cent had their credit score decreased because of missed repayments and 27 per cent have been contacted by debt collection agencies.
Jane Goodland, Trustee of The Centre for Financial Capability said: "These figures reveal the ongoing prevalence of buy now, pay later schemes, and the dangerous financial risks that users face in this wild west unregulated market.
"As the ongoing cost-of-living crisis continues to impact the British public, it is apparent that many users are increasingly reliant on these schemes, without fully understanding the risks involved.
"Most worryingly, our recently released figures have revealed the significant number of Londoners using the schemes who have fallen victim to late payment fees, poor credit scores and even contact by a debt collection agency."
