Buy Now Pay Later services tighten affordability checks

Summarised from 2 outlets · Updated 2 Nov, 11:34 · Archive

Buy Now Pay Later services must now conduct stricter affordability checks on borrowers, risking account closures for those who fail.

Buy Now Pay Later services have been formally regulated since July, requiring lenders such as Klarna and Clearpay to conduct stricter affordability checks on each transaction. Shoppers who fail these checks risk being blocked from using the service or having their borrowing limits reduced.

BNPL is a type of loan usually paid back in instalments without interest, commonly offered at online checkouts. For years, shoppers using BNPL had fewer protections than those buying with credit cards or personal loans. The new regulation brings BNPL borrowers the same rights, including access to refunds for faulty goods and independent rulings on complaints if things go wrong.

Rachel Blake, economic secretary to the Treasury, said the regulation delivers on a promise to give consumers protections they deserve, adding: 'It is not fair that people using these products have had fewer rights than if they had paid by credit card.' Lenders must now be authorised by the regulator to operate.

How it is being reported

• Buy now pay later rules have changed — here’s how to avoid getting caught outLenders need to be authorised by the regulator to provide buy now pay later servicesThe Independent · 2 Nov, 11:14
• Don't get caught out by new Buy Now Pay Later rulesNew affordability checks mean you could be blocked from using Buy Now Pay Later but here are ways to avoid it.BBC Business · 1 Nov, 23:34

In this story: Klarna · Clearpay · Rachel Blake · Treasury · Citizens Advice

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem · Corrections log