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The popular “buy now, pay later” service LatitudePay was inundated with complaints from angry customers in the weeks before it collapsed, it has reported.
In an email to clients on Friday, the firm revealed that it was closing from April 11impacting over 500,000 Australians.
LatitudePay was available at over 5,000 retailers in Australia, including Kogan, JB Hi-Fi, The Good Guys and Harvey Norman.
The service allowed customers to spread the cost of purchasing the products into 10 interest-free weekly payments.
Its collapse seemed to come out of nowhere, yet it has now been revealed that fed up customers regularly left angry comments and bad reviews for the company in the six months leading up to its closure.
Popular buy now, pay later service LatitudePay has announced that it will be shutting down as of April 11, affecting more than 500,000 customers who use it.
Despite maintaining an average customer rating of 3.5 stars on productreview.com.au, the last 20 reviews gave the company one star.
Customers also posted scathing comments demanding refunds.
One review stated: ‘Customer service is zero – if you get a robocall they will time out and then require you to call them.
‘Stay away, there are much, much better providers out there.’
Another said: ‘The app is almost impossible to use. LatitudePay is taking their time to refund something, but they are happy that I have something there.”
LatitudePay announced that it would close in the email sent to customers on Friday.
“Any balance due will continue to be debited from your debit or credit card as normal until the balance is paid in full,” the email said.
‘Once the total amount due has been paid in full, we will close your account. You don’t need to take any action to close.’
LatitudePay’s owner, Latitude Financial Services, said it has shut down the service after an extensive review.
“Buy now pay later has achieved its goal by attracting more than half a million customers to Latitude, but it is an immaterial part of the business, accounting for about 0.3 percent of accounts receivable,” he said.
“Given this, and as a consequence of the uncertainty surrounding the future regulatory environment, Latitude believes that now is the right time to exit the industry.”
LatitudePay’s shutdown comes just a week after a buy now, pay later company went under.
Openpay went into receivership after a disastrous three months in which the company lost $18 million.
The threat of regulation bursting the Buy Now, Pay Later bubble remains, as the government seeks to prevent consumers from racking up debt they cannot afford.
In a submission to a Treasury review of the sector, corporate watchdog ASIC last week backed new rules that would subject these companies to the same lending rules as banks and credit card providers.
The Openpay collapse affected major retailers including Bunnings Warehouse, online marketplace Kogan.com, Officeworks, Spotlight and clothing store Glue.
Australian company Buy Now Pay Later Openpay went under after a disastrous three months in which the company lost $18 million.
Trustees at insolvency firm McGrathNicol have yet to confirm whether these retailers will get their money back, while customers will still have to pay their debts in installments.
Openpay’s most recent quarterly report showed that it had suffered $18.2 million in operating losses and a loss of $38 million in the past two quarters, leaving it with just $17 million in cash equivalents.
It has also failed to turn a profit since going public in 2019, and its decline caused it to withdraw its business from the UK.
Openpay had also tried to sell its US branch while struggling with financial problems.
The company had targeted customers doing higher-value transactions, including for healthcare services with Bupa Dental, one of its retailers.
While running a service similar to Afterpay, which is worth $14.8 billion, Openpay was valued at $45.4 million.
Daily Mail Australia has contacted LatitudePay for comment.