Plans to strengthen the regulation of interest-free buy now pay later (BNPL) credit agreements will be “protecting consumers”, the Treasury has said - and have been welcomed by MoneySavingExpert founder Martin Lewis. Under the proposals announced on Monday, lenders will be required to “carry out affordability checks” and will “amend financial promotion rules to ensure buy now pay later advertisements are fair, clear, and not misleading”, the department added.
Lenders offering the product will need to be approved by the Financial Conduct Authority (FCA) and borrowers will be able to take a complaint to the Financial Ombudsman Service (FOS), the Treasury said. Economic Secretary to the Treasury John Glen said: “Buy now pay later can be a helpful way to manage your finances but we need to ensure that people can embrace new products and services with the appropriate protections in place.
“By holding buy now pay later to the high standards we expect of other loans and forms of credit, we are protecting consumers and fostering the safe growth of this innovative market in the UK.”
