Buy Now Pay Later firm goes bust - what customers need to know about their payments

The 'buy now, pay later' company Laybuy has entered administration. A statement on the Laybuy website says: "Payment services are currently suspended across all regions.

"This impacts our customers ability to create new orders online and in store. During this time, all existing orders will be processed as normal. We'll share more information as soon as we can."

Laybuy, which boasts more than 300,000 users in the UK, offers a service where shoppers can spread the cost of purchases over six weeks without interest. However, the firm imposes a £6 charge for late payments and an additional £6 if the payment remains overdue after seven days.

If a customer is over 42 days behind on payments, they may face action from debt collectors, and Laybuy also shares data with Experian. This means any missed payments could affect credit scores, according to the Mirror.

After shutting down its website in mid-June, Laybuy's collapse has now been officially announced. FTI Consulting has been appointed to manage the administration process.

Joint administrator at FTI Consulting, Sam Ballinger, said: "The joint administrators are currently assessing the options available to the companies and supporting the employees, merchants and other affected stakeholders through this difficult period. Laybuy is not currently accepting new transactions, however, customers should continue to make payments as normal."

What will this mean for Laybuy's users?

Raisin UK data suggests that around 484k UK customers will be impacted by first-of-its-kind administration move in the Buy Now Pay Later (BNPL) sector. Laybuy has taken its website and app offline, leaving customers unable to open or access accounts, and also temporarily halted payments.

The lender stated its services have been suspended, including all payment avenues. Co-founder of Raisin UK and renowned finance expert, Kevin Mountford, urgently reinforced advice, saying: "At present, the administrators are not accepting any new transactions for Laybuy, however, it is critical that customers continue to make their repayments as normal.

"The administrators will be actively working to explore options as to whether a sale of the business can be achieved, and in this case, your debt would be sold on and transactions would need to continue as normal as you would be expected to have made all your payments.

"This news will be incredibly frustrating for their customers across the globe and will be unsettling news for the thousands of users in the UK who have used Laybuy for purchases from leading retailers like Amazon, Marks & Spencer and Next.

"It also will further add to calls for Buy-Now-Pay-Later platforms to face better regulation to help protect customers if another provider were to collapse in the future. With BNPL platforms continuing to contribute to credit scores, this uncertainty will cause significant concern for their users."

Missed payments will still incur late fees, while payments more than 42 days in arrears may be referred to a debt collection agency. You won't be able to reopen a closed account.