The charity’s latest research shows Buy Now Pay Later (BNPL) shoppers were charged £39 million in late fees in the past year.

Of those who were referred to a debt collector for missed payments, 96% experienced a negative consequence. They reported at least one of the following: sleepless nights; ignoring texts, emails and letters in case they were about debts; avoiding answering the door; borrowing money to repay the debt; or their mental health getting worse.

Yet the charity found that not one of the BNPL checkouts on leading retailers’ websites warned people they could be referred to debt collectors for missed payments. Instead this was only flagged in the T&Cs on a separate page, if at all.

Citizens Advice conducted mystery shopping at 100 leading retailers and found 38 offered BNPL, with 22 offering more than two BNPL options, meaning there were a total of 74 BNPL checkouts.

The research also found that out of those offering BNPL, only 11% warned shoppers they were taking out a credit agreement, the remaining 89% put this information in the small print or T&Cs.

Dame Clare Moriarty, chief executive of Citizens Advice, says: “The sheer number of shoppers facing debt collection is startling. We know from our frontline advisers just how much stress this can cause.

“A seamless Buy Now Pay Later checkout process should not mean shoppers have to dig around in the small print to find out they’re taking out a credit agreement, and could be referred to debt collectors if they can’t pay. The warnings should be unmissable.

Citizens Advice asked the BNPL firms featured in the research if they ever referred customers to debt collectors. Klarna, Clearpay, Laybuy and Openpay confirmed they do this as a last resort. Splitit said it doesn’t. PayPal refused to comment.

The charity is calling on the Treasury to urgently regulate BNPL as it fears shoppers have been left unprotected and ill-informed during the rapid expansion of the sector.

Millie Harris, a debt adviser at Citizens Advice East Devon, says: “My concern is that people aren't processing the fact that Buy Now Pay Later is credit. They don't realise there are going to be consequences if they don't pay - it gives them a false sense of security.

“I’ve seen people using it for their kids’ clothes and shoes that they would otherwise never be able to afford. They are taking out what is effectively a loan, but they don't see it as one. For example, I helped someone who has tens of thousands of pounds of debt, but they don't see Buy Now Pay Later as part of that total.

"It's almost under-the-radar debt.”