The UK government has announced new regulations for the booming "buy now, pay later" (BNPL) sector aimed at protecting consumers from unaffordable borrowing. These changes, which will take effect in 2026, include mandatory affordability checks for borrowers and the application of the Consumer Credit Act to BNPL companies. This will ensure that consumers receive clear and accessible information about loan agreements, allowing them to make informed decisions regarding their financial commitments. The new rules will also offer consumers protections similar to those available for credit card purchases, including coverage for faulty goods and breaches of contract under section 75 of the act. Despite these promising developments, campaigners have expressed concern over the delay in implementation, urging consumers to remain cautious in the interim. As the popularity of BNPL continues to rise, the need for regulation has become increasingly urgent to prevent consumers from falling into a cycle of debt.
Read the full article here.