Consumer advocates are raising concerns about a rising tide of debt among young people, particularly linked to the increasing popularity of “buy now, pay later” services. Ramona Pop, Director of the Federation of German Consumer Organisations (VZBV), highlighted a significant surge in youth debt during the past year, attributing the trend primarily to these installment payment options.
Pop emphasized that many consumers, especially younger individuals, appear to be unaware that these services constitute a form of credit. She noted the potential for serious consequences, including negative impacts on credit scores (Schufa), which can impede future endeavors like securing housing. The VZBV has documented instances of young people accumulating debts of up to €1,500 through these deferred payment plans.
Recent legislative action by the Federal Cabinet aims to provide enhanced protection for consumers, including young people, regarding credit agreements. This includes a requirement for creditworthiness assessments prior to offering “buy now, pay later” services, intended to mitigate the risk of unsustainable debt accumulation.
