AfterPay is a service with the BNPL (Buy Now, Pay Later) option, which lets customers purchase and pay back conveniently in installments. Introduced in 2015 in the U.S., AfterPay had received unprecedented levels of recognition.
But, if you fail to make the AfterPay installment payments, you might be worried that you might go to jail for not paying AfterPay. In this blog, let’s explore what you can expect for avoiding payments of AfterPay and the legal consequences in detail.
Would You Go To Jail If You Don’t Make The AfterPay Payments?
If you ask can you go to jail for not paying AfterPay debts,No! You’ll not have to go to jail in case you fail to pay back the money to AfterPay. This applies even if you maliciously deny paying back the amount used for funding the purchase you make.
However, this doesn’t mean everything remains fine if you ignore the payment. It can cause a permanent impact on your future with consequences like losing your account, debt collectors chasing you, etc.
If your payment is overdue, any payments you make late, or when you need a grace period, it results in a late fee. The unpaid late fee will again lead to an additional partial late fee after seven days.
Also, the account will stop until you settle all the overdue payments. If you refuse to pay the installments for quite a long time, then the company can take legal action against this practice.
As the first step, you’ll get caught by police which results in a legal court case. You should pay the fee along with the interest to the company. Hence, AfterPay not only impacts the credit history but also causes major legal conditions.
Also Read:How Does AfterPay Make Money?
What Are The Consequences Of Paying Late To AfterPay?
If you don’t pay the AfterPay for a short while, the problems are common.
However, when you have a huge amount to be paid, you make it too late to pay or avoid paying it indefinitely, and the impact would be different.
Since AfterPay has rarer balances and checks in place than the credit cards, it allocates the responsibility to you to ensure you’ll be able to afford them.
Here are the consequences you would face when you delay AfterPay payments.
You Will Be Charged A Late Fee
Whenever payments are late, AfterPay charges a late fee, which continues to add up with time. Presently, the late fee policy for AfterPay is fixed and straightforward.
The late fee in the U.S. is as follows: you have to pay up to $8 maximum or at least 25% of the purchase price for the product (choosing whichever is less).
Hence if you use AfterPay to buy a product with a price less than $32, you needn’t pay the full cost of $8. But, the late fee policies vary based on the country you are in.
Your Account Could Be Frozen
When you don’t pay off the debt in the due time, AfterPay can stop you from using it.
With this policy, the debtor fails to use AfterPay for all future purchases despite having a great payment history.
In the worst cases, the company could block or stop your account if you refuse to pay them.
AfterPay automatically freezes the account The first payment doesn’t fall on the agreed date. Being a buy-now-pay-later provider, it also rejects future transactions till the overdue amount and late fees get completely settled.
Future Limit Will Reduce
AfterPay can lower the future credit limit you have if you don’t pay back the amount. Unfortunately, this will be the situation even while you sought to pay back AfterPay completely.
Since AfterPay is a service that doesn’t look for your credit history, it holds very little data to work with while assessing your risk. When you miss a payment even for a short period, they tag you as a risky person to whom they lend money.
It works just like the impact of late payments on credit scores while using credit cards. When you miss a payment, they reduce your credit limit with them.
Also Read: How Does GoodRx Make Money?
It Can Affect Your Credit Score
Many people remain unaware of this fact, but AfterPay impacts your credit score.
Though they don’t implement credit checks before lending money, it can affect the score if you don’t pay them the money back.
Some reports online said that AfterPay reports negative account activity to the respective credit agencies based on the country, but the website has itself said they never do this.
However, AfterPay might send the debt to the specific collection agencies that report the default, and finally which affects your credit score.
You May Be Sent In The Hands Of Debt Collectors
If you fail to pay back the amount to AfterPay, you might be sent to the hands of collection agents. Just because you don’t make the payment, it doesn’t mean that you are away from the hook– AfterPay debt collection follows you!
Nobody wants to deal with the debt collectors, also if you have something sent to the collectors, this doesn’t work well for your financial future as well.
Hence, it is important to be alert of things and pay on time if you wish to fund purchases in the future with the help of AfterPay.
Also Read:How Does Fetch Make Money?
How Long Does It Take For AfterPay To Ban You?
AfterPay closes your account. If you fail to make the first payment on the date on which you have agreed to pay back to the company.
This occurs due to your failure to settle the overdue balances and the late fees as mentioned by the company based on the time taken after the agreed date has crossed.
This late remittance generally results in a quick account freeze, especially when you are new to AfterPay and do not hold a solid history of repayment.
Based on how late the settlement happens and the transactional value, fees get levied. Until you pay off all the past due payments, your AfterPay account remains suspended.
If you delay the installment payment for your purchase and fail to pay within the grace period (usually 10 days), you need to pay a late fee.
Your account will continue to be frozen until you get it unbanned, paying off all the late payments.
Can You Be Permanently Banned from AfterPay?
AfterPay doesn’t have a blacklist. However, since skipping payments doesn’t work well for both you and the company, whenever you miss the payment the company quickly pauses the account.
This stops you from buying anything else with AfterPay till you go back and make the payments up to date. You might also notice that the spending time decreases— this happens as the system considers a variety of factors like late payments in choosing the spending limits.
Missing the payments can cause harm to your tier in the rewards program of AfterPay. Also, if you find yourself unable to make the payments for a long time, then you cannot use the services indefinitely.
If you wonder if you can get unbanned from AfterPay, yes you can! Make AfterPay login initially, then clear the due installments using manual payment, and make sure these are up to date. This helps AfterPay unfreeze your account; so you can continue to enjoy its benefits.
Is AfterPay A Safe Platform?
AfterPay purchase is secure and convenient. This is a popular option of payment that lets customers make installment payments instead of upfront payments.
If you make installments in time, AfterPay is the right platform you can use. It helps you adjust the installment as per your choice. You can also set the limit for the installment as you wish.
Hence, being one of the most reliable platforms, you can trust it and use it for purchases. However, note that it works only for the purchase of online items.
Regarding the safety of using AfterPay, it has the highest payment data security level across the globe, as per the standards of PCI Global Security Standards Council.
With this adherence in place, AfterPay includes:
- Highly secure networks and systems
- Great data protection
- Regular monitoring and testing
- Powerful access control
If you are an AfterPay user, you should stay punctual while using the platform. Make sure you pay the amount due at least a day or two early. This lets you remain happy and improve your credit score.
Having mentioned all the consequences you might encounter while skipping the AfterPay installments, it’s advised to avoid all these situations and legal obligations through regular payments.
Also, if you fail to afford the payment, it’s great if you can borrow the amount from anywhere. Else, you need to pay off the amount with interest.