Plans to strengthen rules around buy now pay later (BNPL) lending are taking another step forward, with the launch of a consultation looking at how firms would be brought under the scope of the City regulator. Under UK Government proposals, BNPL products will be regulated by the Financial Conduct Authority (FCA) and customers will have new rights to take complaints to the ombudsman.
An eight-week consultation is being launched on Tuesday, looking at how firms would need to comply with FCA rules, including how they would need to spell out the key information about loans to customers. The Government said the new regulations are set to help protect an estimated 10 million customers.
BNPL can be a handy way to spread the cost of purchases, while potentially avoiding the need to pay interest. But there have been concerns about the ease at which people can build up significant amounts of debt relatively easily, with many BNPL products appearing at online shopping checkouts. Some people may end up borrowing more than they can comfortably afford to repay.
