1) Factoring in the hidden costs of buy now pay later

Courtesy Barrie360.com and Canadian Press

By Ian Bickis, July 4, 2025

When any service is offered for free, it’s good to know why. 

In the booming market of buy now, pay later financing, those opting in generally get to spread payments over a number of weeks at no cost, because it’s the merchants that pay for the service in the hopes it will convince consumers to spend more. 

That’s certainly the promise providers like Affirm and Klarna advertise to businesses, touting 20-something per cent boosts to order totals, while Shopify says its instalment program can lead to up to a 50 per cent boost in average order value, plus up to 28 per cent fewer abandoned carts.

While the option can add convenience at possibly no direct cost to consumers, financial experts warn it’s far from risk-free.

“The temptation is very great to overspend,” said insolvency trustee Doug Hoyes.

With the option popping up during online checkout, or being offered by a cashier, consumers are also not necessarily fully thinking through the decision, and the implications of what they’re agreeing to, said Hoyes.

“For the vast majority of people, you are taking on debt without really realizing it. You’re not making a conscious decision that yes, I will borrow that money. And that’s dangerous, obviously.”

While the vast majority of buyers pay off those debts — which tend to run in the hundreds of dollars rather than the thousands — there’s also a rising push to have the data shared with credit-reporting agencies, creating new areas of risk.

Just last week in the U.S., reporting giant FICO said it was launching its first credit scores that incorporate BNPL data. 

And in April, Affirm said it would start sharing data with TransUnion in the U.S., with a goal to do so in Canada as well, said spokesman Brian Levin.

“We believe that reporting to credit agencies supports responsible lending and promotes positive credit outcomes.”

In Canada, Equifax said its credit reports have started to include data from some BNPL lenders, which may be used in the calculation of credit scores.  

TransUnion said it’s still in the development stage of figuring out how to integrate BNPL data, including creating a separate section on credit reports to reflect the unique nature of these products, said spokeswoman Hyunjoo Kim.  

While work progresses to add BNPL to credit reporting, some providers have raised concerns.

Klarna said in March last year that it wasn’t sharing BNPL data with U.S. credit-reporting agencies because it doesn’t fit in well with other types of loans. 

The company, which confirmed it doesn’t share data with Canadian agencies either, said adding BNPL to existing credit-reporting models could leave consumers worse off. 

“As there is little clarity on the potential long-term impacts to the consumer, we believe this approach is too risky,” it said. 

Other providers, like AfterPay, also say they don’t provide any data to credit-reporting agencies. Sezzle said sharing data with ratings agencies is an option for those who choose its Sezzle Up program to built their credit.

The varying approaches on credit reporting are also a reminder of the variety of other subtle policy differences between providers that consumers should consider before signing up. 

Some, like Affirm and AfterPay, will halt any further purchases if a consumer falls behind on payments, while others like Klarna do the same, but could also charge a small late fee and send unpaid debts to collection agencies.

Most providers are also increasingly offering longer-term loans, with rates ranging anywhere from zero interest into the 30 per cent range. Some are also striking partnerships for bigger-ticket items like exercise equipment and flights, making for a potentially risky transition to higher debt loads. 

Just the fact that there are so many providers also raises the risk of stacking them, and having to keep track of multiple accounts of debt, said Natasha Macmillan, Ratehub.ca’s head of everyday banking.

“Because of the zero-interest appeal, it almost gives people a false sense of affordability,” she said.

“The real caution I would provide is ensuring that, if you do have one, or multiple, you’re looking at the total cost of all of the Buy Now, Pay Later programs that you have ongoing, to ensure that you can actually cover the cost of each of them.”

The strain of those cheap loans is starting to show for some providers. Klarna’s most recent quarterly results showed a 17 per cent increase in consumer credit losses, and its overall losses doubled, raising concerns it could be the start of wider industry trouble.

But the company’s credit loss rate was still only 0.54 per cent, showing the vast majority of borrowers are still repaying their debts.

The bigger question is whether consumers are spending more than they meant to, and if money they had planned to put elsewhere is now going toward paying back those purchases. 

To avoid a pile of unexpected bills, Hoyes said the key when shopping is to think ahead.  

“There’s nothing wrong with using a credit card or Buy Now, Pay Later or a car loan or a mortgage or anything like that. It’s when you don’t have a plan, when it becomes an impulse purchase when you’re standing at the store, that’s when you can get into a bit of trouble.”

2) OPP and CAFC advise of increase in bank investigator scam reports: Canadian Anti-fraud Centre Bulletin

Courtesy Barrie360.com

By Julius Hern, June 28, 2025

After an increase in reporting related to the “bank investigator” scam, Southern Georgian Bay Ontario Provincial Police (OPP) and the Canadian Anti-Fraud Centre (CAFC) are warning residents about various scams that they may encounter on the telephone or online.

The CAFC says fraudsters are impersonating financial institutions, law enforcement, e-commerce platforms, and credit reporting agencies claiming that the victim’s bank account has been compromised.

Personal information could be provided by suspects in the scam to make the interaction seem legitimate. That includes but isn’t limited to:

• Name
• Date of birth
• Phone number
• Address
• Social Insurance Number (SIN)
• Debit card number

Additionally, suspects are spoofing financial institutions, law enforcement and credit reporting agencies’ phone numbers or are providing fraudulent call-back phone numbers which impersonate the institutions.

Here’s what the OPP and CAFC want residents to know about the bank investigator scam:

Current variations

1)

Victims receive an automated phone call claiming to be their financial institution, law enforcement, credit reporting agency or, in some cases, e-commerce platforms advising that there have been fraudulent transactions in their account.

Scammers will request access to the victims’ device to continue the “investigation”. Victims are then shown a fraudulent transaction on their online bank account. The suspects state that they want the victims’ help in an ongoing “investigation” against the criminals who stole their money and request that the victims send funds as part of the “investigation”.

In some cases, fraudsters will add the victim as a “payee” with a fraudulent email address and advise that the victim must transfer a large amount of money in order to protect their account. The fraudsters will convince the victim that they have added funds to the victim’s account but, in reality, the funds were transferred from their line of credit or savings account.

2)

Suspects may have the victim’s debit card number and password but cannot access the victim’s account due to multi-factor authentication protection on their account. They then proceed to contact the victim claiming to be their financial institution and will advise them that they must provide a code they receive via text message or email in order to confirm their identity.

The code the victim provides is the multi-factor authentication code which gives the suspects full access to their bank account.

3)

Suspects will advise that they are required to retrieve the victim’s debit or credit card from their residence as part of the investigation. Suspects will attend the victim’s residence to pick up the card and they may even ask the victim to cut the card in half without damaging the card chip to make the call seem more legitimate.

They may also threaten victims that they may be arrested if they do not cooperate.

How to Protect Yourself

• Criminals use call-spoofing to mislead victims. Do not assume that phone numbers appearing on your call display are accurate.
• If you get an incoming call claiming to be from your financial institution, advise the caller that you will call them back. End the call and dial the number on the back of your bank debit card from a different phone if possible or wait 10 minutes before making the outgoing call.
• Credit bureaus will not randomly call you, unless it is a requested call back. If you receive an incoming call claiming to be from a credit bureau, advise the caller that you will call them back. Visit the credit bureau’s website and contact the official phone number provided.
• These institutions or law enforcement will never threaten you over the phone.
• Don’t share codes received via text message or email with anyone. In most cases, these are multi-factor authentication codes that will give fraudsters access to your account.
• Fraudsters will often provide the first 4 to 6 numbers of your debit or credit card. Remember that these numbers are used to identify the card issuer and are known as the Bank Identifier Number (BIN). Most debit and credit card numbers issued by specific financial institutions begin with the same 4 to 6 numbers.
• If your personal information has been compromised in the past through a breach or a phishing message, remember that the information can be used as a tool to make the communication appear legitimate.
• Never provide remote access to your computer.
• Institutions or online merchants will never request transferring funds to an external account for security reasons.
• Institutions or police will never request you to turn over your bank card nor attend your residence to pick up your bank card.
• Enabling auto-deposits for e-transfers provides an additional layer of security.
• Learn more tips and tricks for protecting yourself.

Anyone who suspects they have been a victim of cybercrime or fraud should report it to their local police and the CAFC either through its online reporting system or by phone.

If not a victim, you should still report the incident to the CAFC.