On 14 February 2023, the Financial Conduct Authority (FCA) announced their plans to strengthen regulations around Buy Now Pay Later (BNPL) lending and is taking a step forward with the launch of a follow up consultation implementing legislative changes that will ensure that BNPL credit services are now regulated.
This new change means customers will now have new rights to make complaints to the Financial Services Ombudsman (FOS). With an eight-week consultation now launched, legislators are aiming to ensure consumers will have the similar protections to those who are using regulated forms of credit such as credit cards and loans. The consultation will also look at how BNPL businesses communicate key information to their customers in a clear manner. Following the consultation, the legislation is set to be introduced within the next 12 months or so.
Our expert and financial services partner, John Pauley, commented:
Many providers have already been preparing for these changes but even those who have will need to keep abreast of developments in order to make sure they are compliant. Furthermore, the changes are likely to require existing providers to apply for a new regulatory permission for which there will be a transitional period to allow firms to do so.
Understanding your responsibilities to clearly communicate the legal terms of your BNPL service to your customers can be complex. Our financial services regulation lawyers can help ensure you are compliant with the upcoming legislation without the complexities of legalese and jargon. Get in touch with us today via the contact form below.