Buy Now Pay Later rules to bring refunds and rejections
New regulations for Buy Now Pay Later (BNPL) services in the UK now require lenders to be authorized by the Financial Conduct Authority. These rules aim to provide consumers with better refund rights and complaint resolution, though some fear stricter affordability checks may push users toward unregulated loan alternatives.
Why it matters
This represents a significant shift in consumer credit regulation, aiming to curb the 'Wild West' nature of the BNPL industry while balancing access to credit.
Image source, Getty Images By Kevin Peachey Cost of living correspondent Published 1 hour ago Shoppers using Buy Now Pay Later (BNPL) services have stronger rights but some will be refused loans, as new rules come into effect.
From Wednesday, BNPL lenders must have regulator approval to operate, giving shoppers more access to refunds and independent rulings on unresolved complaints if things go wrong.
Providers such as Klarna and Clearpay have become huge operators allowing consumers to pay in interest-free instalments, but campaigners have often described the wider sector as an unregulated Wild West.
But there are fears that new affordability checks on each BNPL transaction will leave some blocked for the first time, pushing them towards "thrilled" loan sharks instead.
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