Protections to Help Buy Now Pay Later Borrowers Navigate Their Financial Lives

BNPL FCA regulation is set to bring key consumer protections to buy now pay later lending in the UK. The Financial Conduct Authority proposes affordability checks, complaint access via the Ombudsman, and mandatory support for borrowers in difficulty. These BNPL rules mirror protections in other types of credit.

Buy now pay later (BNPL) borrowers will benefit from key protections in place for other types of lending, under proposals put forward by the Financial Conduct Authority (FCA).

The proposals include requiring lenders to check that people can afford to repay BNPL loans and to offer support if they get into financial difficulty. They form part of the FCA’s commitment to helping consumers navigate their financial lives. BNPL borrowers will also be able to complain to the Financial Ombudsman Service if something goes wrong. The rules would take effect when BNPL comes under the FCA’s remit next year.

Sarah Pritchard, Deputy Chief Executive at the FCA, said: “We have long called for BNPL products to be brought into our remit, so people can benefit from BNPL while being protected. Our regulation will help consumers navigate their financial lives, with checks on whether they can afford to repay, support when things go wrong and access to the right information to make informed decisions.

“We’re mainly relying on existing requirements, including the Consumer Duty, rather than proposing to make lots of new rules, supporting growth and allowing firms to innovate.”