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Bruce B. Nov 20, 2022
Financial Services News
Last active over 7 days
Last active over 7 days
The UK government has announced plans to strengthen regulation around interest-free buy now, pay later (BNPL) credit agreements to protect “millions of people”.

Under the plans, lenders will be required to carry out affordability checks to ensure loans are affordable to customers and rules will be amended to make sure advertisements are “fair, clear and not misleading”.

Lenders offering Buy Now Pay Later services will need to be approved by the Financial Conduct Authority (FCA), borrowers will be able to lodge complaints with the Financial Ombudsman Service (FOS).

“Buy Now Pay Later credit agreements can be a helpful way to manage your finances, allowing people to spread the full cost of a purchase over time,” the government says.

“However, people do not currently have the usual full range of borrower protections when taking out this type of loan and they are rapidly increasing in popularity, resulting in a potential risk of harm to consumers.”

“By holding BNPL to the high standards we expect of other loans and forms of credit, we are protecting consumers and fostering the safe growth of this innovative market in the UK,” says John Glen, economic secretary to the Treasury.

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