Risks of buying now, paying later; banks may be more inclined to sell racialized customers: CBC Marketplace cheat sheet


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Many online shopping platforms now offer the option to buy now, pay later. But are there more risks than it seems?

A luxury bag can be much easier to digest if you can pay for it in four small installments instead of one big one, but the growing popularity of buy-it-now, pay-later (BNPL) services like Klarna, PayBright, Afterpay and Sezzle may be contributing to higher debt levels among young people.

On TikTok, fashion influencers are peddling the option, and big companies like Apple are even getting in on the action. But personal finance expert Mark Ting doesn’t recommend consumers turn to BNPL’s services, saying they can encourage young consumers with little financial knowledge to overspend.

“You can fall into the trap of buying a whole bunch of stuff, spending too much, thinking those low monthly costs are reasonable,” Ting said. “And then all of a sudden you have a whole bunch of them.”

BNPL is essentially like a point-of-sale loan, where a customer purchases an item and then pays for it in regular installments over the course of a few weeks or months. These programs aren’t exactly new — car dealerships and furniture stores have typically offered interest-free financing options for years. But BNPL loans are becoming more mainstream and better integrated with online shopping platforms, giving consumers the ability to finance almost any type of purchase with the click of a button.

The growing popularity prompted the Financial Consumer Agency of Canada to conduct a pilot study on the use of these services last year. Although the results are not statistically significant due to the small number of respondents, the study found that among those surveyed – young consumers aged 18-34 – use BNPL’s online services the most.

According to Swedish fintech company Klarna, a major global player in the field, consumers are spending 45% more when using buy now, pay later – which is great for retailers but could ultimately have negative effects on levels consumer debt. Read more

Do you have an experience with “Buy now, pay later” services that you would like to share? Email us at [email protected]

WATCH | BNPL schemes carry financial risk, according to experts:

Buy now, pay later plans pose financial risk: experts

Personal finance experts warn that buy now, pay later installment loans can hurt consumers’ finances, especially when it comes to younger buyers.

Canada’s big banks more likely to sell to racialized and Indigenous customers, report finds

Hardik Patel knew something was wrong when a Royal Bank customer service agent told him there was only one way to access his RRSP account online: he would have to open a chequing account, with monthly fees.

He knew that wasn’t true because he had accessed his RRSP many times before.

Frustrated that he was being sold a product he didn’t need, he asked to speak to a manager.

Patel wanted assurances that RBC staff wouldn’t try to sell someone else, and he also took issue with a remark the agent made about his accent.

“They were pushing me to buy something I didn’t need,” he told Go Public.

Patel’s experience mirrors some findings from a recent reportyears of preparation, from the Financial Consumer Agency of Canada which suggests that racialized bank customers are being offered inappropriate financial products more often than other customers.

The report was prompted in part by a Go Public investigation into high-pressure sales tactics within big banks.

“What [the RBC agent] said was racist,” Patel said. “I want this to stop. So tell me what steps you’re going to take to make sure more people aren’t treated this way.”

RBC said it regretted the incident and that “appropriate steps” had been taken to prevent anything similar in the future – but it did not elaborate on those steps.

Dissatisfied, Patel filed a complaint with the Human Rights Commission. Last month, he and RBC reached a settlement before his case was heard.

He is not authorized to discuss details or comment on what happened, as the bank demanded that he sign a non-disclosure agreement.

In a recent statement to Go Public, an RBC spokesperson said: “Discrimination – in any form – goes against everything we stand for and is not tolerated.

He also said the bank continues to provide training to employees “to deepen awareness of the concepts of diversity, bias and racism.” Read more

Hardik Patel, seen outside the Royal Bank of Canada’s head office in Toronto, says one of the bank’s officials tried to pressure him into opening a useless checking account. (Submitted by Hardik Patel)

Transgender advocates slam WestJet for forcing passengers to identify as male or female

Transgender advocates across Canada are calling on WestJet not to allow people to choose X as their gender, instead of male or female, when booking flights.

“It’s a legal gender marker in our laws, it’s a violation of the Charter [of Rights and Freedoms]“said Iz Lloyd, a non-binary person from Halifax who was recently denied boarding on a WestJet flight until she agreed to identify as her sex assigned at birth.

Lloyd, who uses the pronoun they, said their passport had an X instead of masculine or feminine. But WestJet still hasn’t added this option to its reservation system.

The company told CBC via email on Wednesday that several unexpected hurdles with their third-party booking agencies had delayed the implementation of Marker X.

“At WestJet, we are committed to ensuring our guests have a fair travel experience and we owe a further explanation and apology regarding our progress in adding non-binary options to our reservation and check-in systems,” said said Denise Kenny, a WestJet media representative.

In a statement posted on WestJet’s website, the company again apologized and said it was committed to “implementing changes to our national reservation systems to include gender X by end of 2022”.

But for some transgender people, like Mattie McMillan, who uses the she/they pronouns and also uses the X marker, that’s still not enough.

They say if no action is taken by the end of June, lawyers will pursue the matter further, potentially in court. Read more

Iz Lloyd of Halifax says their experience with WestJet was the worst they have ever had with any airline. (Dave Laughlin/CBC)

What else is going on?

Camera sales shemozzle highlights how eBay policies affect sellers
The consumer advocate says eBay’s policies are geared toward the business, the buyers.

CBSA officers caught giving preferential treatment, associating with criminals, documents reveal
The border agency says it concluded 92 “founded” investigations last year.

CAFE owner cleared of all cannabis charges as latest crackdown on illegal pot shops fails
Mohsen Ghelichkhani was acquitted of 6 counts of allowing the use of his property for the illegal sale of weed.

Shortage of mustard seeds forcing Quebec condiment manufacturers to scramble
Prepare to pay more for the classic hot dog topping.

The marketplace needs your help

Have you ever had a bad experience buying jewelry – counterfeits, misleading claims, or shoddy pieces – from a reputable jeweler? Marketplace wants to hear from you. Email us at [email protected]

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