New buy now, pay later rules aim to protect shoppers
Summary
The UK government has announced new rules to regulate buy now, pay later (BNPL) services to protect consumers. These rules will require lenders to check if customers can afford the debt and make it easier for users to get refunds. This move comes as the use of BNPL services has increased significantly in the UK, with concerns that people might be spending beyond their means.Key Facts
- The government introduced new rules to regulate buy now, pay later (BNPL) services.
- Lenders must perform affordability checks to prevent excessive borrowing.
- Shoppers will get faster access to refunds under the new rules.
- 11 million people in the UK used BNPL services in the last year.
- Consumer groups support the regulation, as many users were unaware of potential debt.
- BNPL allows paying for purchases in installments over weeks or months.
- Measures include the right to complain to the Financial Ombudsman.
- The Financial Conduct Authority found BNPL usage rose by two million in three years.
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