'Pushy' online retailers leave people with mental health problems at risk of lockdown debt, says new report
The increased presence of ‘buy now pay later’ products, ‘one-click’ purchases and pushy, personalised marketing from shopping websites has left many people with mental health problems at risk of financial harm since the start of the coronavirus pandemic, a new report has shown.
Update 2 February 2021: HM Treasury has confirmed plans to regulate buy now, pay later firms following the publication of the Financial Conduct Authority's 'Woolard Review', which also called for this. See Buy now, pay later firms to be regulated – and all shoppers will face affordability checks for more info.
New national polling for the Money and Mental Health Policy Institute (MMHPI) - which was set up by MSE founder Martin Lewis - shows that over three million people with mental health problems have found it harder to control online spending since lockdown, in part due to the design of online retail sites.
And the charity is calling on retailers to offer customers more tools to manage online spending in the run up to Black Friday later this month, such as the choice to opt out of ‘buy now pay later’ services, or to have a ‘cooling off’ period before completing purchases.
It's also calling on competition watchdog the Competition and Markets Authority to ensure that online shopping sites comply with consumer protection laws, for example not pressurising customers into impulsive purchases.
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What does the polling for MMHPI show?
New Opinium polling of 2,000 UK adults for MMHPI shows that:
- People who’ve experienced mental health problems in the past two years are twice as likely as the wider population to have spent more than they can afford online. 29% have done this compared to 12% of the wider population, while 47% who've experienced recent mental health problems have purchased goods they don’t need, compared to 23% of others.
- A quarter of adults with recent mental health problems (26%) say they have struggled to stay in control of online spending during lockdown, amounting to three million people across the UK.
- The ever-present availability of ‘buy now pay later’ (BNPL) products is a particular problem with over half of UK adults (56%) saying that BNPL services make it too easy to get into debt. Two in five (42%) of those with recent mental health problems saying that BNPL has been harder to resist since lockdown.
What does MMHPI say?
Helen Undy, Chief Executive of the Money and Mental Health Policy Institute, said: "Online retail can be a lifeline for people living with mental health problems who may struggle to leave the house, especially during the pandemic. But pushy sites and tempting ‘buy now pay later’ offers can cause people to spend more than they can afford, risking both their financial and mental health.
"This is particularly challenging in lockdown, with many of us spending longer online, bombarded by adverts telling us that the latest new thing will make us feel better. At its worst, this can leave people in thousands of pounds of debt, with a single day’s shopping spree causing years of misery.
"With more people facing mental health problems this year, as we approach Black Friday retailers must take action to help customers stay in control. Simple steps, like making it easier for customers to avoid ‘buy now pay later’ options, could help people avoid serious financial harm at this difficult time."