Summary
Shoppers using 'buy now, pay later' services in the UK will face stricter rules from next July. These rules will include checks to ensure people can afford to repay, preventing financial troubles. This change aims to protect consumers by reducing debt risks.
Key Facts
- Stricter affordability checks for 'buy now, pay later' will start in July next year.
- Shoppers may be refused this type of credit if they cannot afford it.
- Current 'buy now, pay later' services are not regulated by the FCA.
- 11 million people in the UK used these services in the past year.
- A survey found that 30% of adults between 25-34 used these services in the last year.
- The Financial Conduct Authority (FCA) will regulate the sector and plans to introduce rules for better consumer protection.
- New rules include faster refunds, clear rights on cancellations and charges, and considerations on credit ratings.
- Over ten years, regulations could save consumers £1.8 billion and reduce providers' profits by £1.4 billion.
