With the Treasury planning to tighten the rules for “Buy Now Pay Later” (BNPL) lenders by bringing them into the scope of Financial Conduct Authority (FCA) regulation, it will bring greater scrutiny to lenders and cause them to double check their affordability assessments to ensure they are robust and appropriate. However, it also represents huge opportunity, especially during the cost-of-living crisis.
BNPL provides customers with interest-free credit, usually for up to 12 months, which is regularly offered by retailers to help customers spread the cost of purchases. Although it is interest free, many BNPL lenders charge late fees and lack of regulation of the sector has caused serious concern about consumers building up crippling amounts of debt. From my experience, it’s certainly the case that some don’t understand the potential dangerous implications of entering into multiple agreements.
