Our response to FCA’s "Buy Now, Pay Later" rule changes

_{12 June 2019}

The Financial Conduct Authority has today confirmed its new requirements in reform of "Buy Now, Pay Later" (BNPL) credit offers.

The measures will require retailers to present buy now, pay later offers in a clear and balanced way, give people adequate explanations of the costs and potential negative consequences, and prompt people when the 0% interest period is due to expire to give them chance to repay the balance in full before interest is charged.

Buy now, pay later services are widespread, and are a factor driving both store card and catalogue debts. Around 12% and 34% of StepChange clients have these types of debts respectively.

Peter Tutton, Head of Policy at StepChange Debt Charity, says:

"The FCA’s changes are modest but welcome, though whether they will fully achieve the objective we would like to see that credit should always be “bought rather than sold” remains questionable. When people’s eyes are on the goods they want to buy, and the credit is being offered through the retailer, it is particularly important that the nature of the credit product being dangled as the means to the desired end is made unequivocally clear.

"It is positive to see the FCA banning the practice of backdating interest on any element of borrowing repaid within the borrower’s 0% interest period. Looking ahead, we would hope to see the FCA take a closer look at the ongoing use of discounts and incentives. We would like the FCA to continue to scrutinise the evidence of consumer harm in this area and ensure consumers are protected against poor practice."