The UK Treasury is moving forward with plans to regulate the Buy Now, Pay Later (BNPL) sector, aiming to protect consumers from potential debt traps. A consultation has been launched to allow the Financial Conduct Authority (FCA) to impose regulations on BNPL firms, which have gained popularity for enabling shoppers to spread payments over time without immediate interest. However, concerns have been raised about the lack of oversight, particularly for vulnerable consumers who may struggle with repayments. The proposed regulations would require BNPL providers to conduct affordability assessments and would grant consumers similar rights to refunds as those provided under credit card transactions. This initiative follows previous government commitments that never materialized. While the move has been welcomed by financial experts, there are warnings that full regulatory protections may not be implemented until 2026, leaving consumers at risk in the meantime.
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