Money Saving Expert founder Martin Lewis said he was “very concerned” about the growth of “buy now, pay later” programs in the UK.

The financial expert and TV presenter told his 1.1 million Twitter followers: “It’s exploding like payday loans have done. And like payday loans were, it’s a huge credit industry that isn’t regulated – so few rules, and you can’t go to [an] mediator. This must change.

Lewis joined with Labor MP Stella Creasy in urging the government to take action against companies offering to ‘buy now, pay later’ by regulating them.

As it stands, these companies – which essentially allow people to buy items online and pay at a later date, often in installments – are unregulated in the UK.

They are generally interest-free and as such are increasingly popular with online shopping sites often advertising them as one of the first payment options.

At a time when incomes could be strained – we are in a pandemic and Christmas is just around the corner – there is a huge draw to using these services. They’re also easy to sign up – all you need to do is fill in your details during physical or online payment and know almost immediately if you’ve been approved or rejected, after a quick credit check.

Helen Saxon, Money Saving Expert banking editor, told HuffPost UK: “These short-term two- or three-month ‘buy now pay later’ programs are problematic because they are so easy to apply.

“Some people don’t even realize they are taking out a loan because there is no interest. And while individual ‘buy now, pay later’ vendors will limit how much you borrow from them, you could easily find yourself owing more than £ 1,000 from different vendors. “

There’s also a temptation to spend more than usual, she says, because the process is so simple and the “pain” of handing over money for something is postponed until next week or month.

But the service can quickly get expensive if you don’t make your payments on time – and people can end up in debt. According to Experian, if you don’t resolve your debt by the end of the delay period, some providers will charge you a settlement fee or a lump sum of interest may be added to the debt. External debt collectors could also be involved.

You may be charged late fees and any missed payments may be recorded on your credit report. “A lot of people don’t realize with some of these programs that there are late fees if you don’t make the payments on time,” Saxon adds, “and they don’t realize that the missed payments could end up on their credit report, affecting their ability to obtain further credit in the future.

The Financial Conduct Authority (FCA) is the UK regulator responsible for keeping financial businesses online and protecting consumers, but does not regulate subsequent short-term ‘buy now-pay’ loans which are not regulated by the FCA, says Saxon, which means vendors don’t have to perform the same checks that you would have to perform to get, say, a credit card, overdraft, or loan.

If you have to complain about a “Buy Now, Pay Later” provider, you might also have a hard time getting enough support. “Because they are unregulated, you cannot go to the financial ombudsman if you complain to the supplier ‘buy now, pay later’ and that does not help or address your complaint,” adds she does. “With other regulated forms of credit, this is an automatic right.”

Clearly, these services are useful for those who only buy things they have budgeted for and can make payments on every due date. “Like any well-used credit, ‘buy now, pay later’ can be a valuable tool,” says Saxon.

“But not everyone is financially disciplined, and that’s why we need regulation of all ‘buy now, pay later’ products – to ensure that those who are most vulnerable or most susceptible from contracting unmanageable debts are protected, ”she adds.