From Wednesday July 15 2026, buy now pay later (BNPL) providers will be regulated by the Financial Conduct Authority (FCA), introducing new standards for affordability checks, clear terms, and access to the Financial Ombudsman Service (FOS) for complaints.
What Is Changing Under FCA Regulation?
The UK Government has brought the BNPL sector under FCA supervision, meaning firms must now provide customers with clear upfront information about payment schedules, amounts owed, and consequences of missed payments. Lenders are required to carry out proportionate affordability checks to ensure customers can repay before offering BNPL credit. This change aims to protect consumers from accumulating unmanageable debt.
BNPL, also known as deferred payment credit, allows shoppers to spread the cost of purchases over a set period interest-free. Providers make money through transaction fees from retailers and late payment charges from consumers. While useful for managing cash flow, the sector has faced criticism for encouraging overspending and leading some users into debt.
Why Were Concerns Raised About BNPL?
Consumer groups and regulators have highlighted risks: some people spend more than intended, and multiple BNPL loans can quickly exhaust a budget. This may force individuals to take on costly debt, such as overdrafts, to cover BNPL payments. The new rules aim to mitigate these risks by ensuring lending is responsible and transparent.
New Consumer Protections from Wednesday
From July 15, BNPL firms must offer support to customers in financial difficulty and direct them to free debt advice. Additionally, BNPL usage may now appear on credit reports, affecting future lending decisions positively or negatively based on repayment behaviour. Some providers already claim strong protections and have welcomed regulation as a way to level the playing field.
How to Complain About BNPL Agreements
Customers can complain to the Financial Ombudsman Service if unhappy with their BNPL agreement, for example regarding affordability. The FOS settles disputes between consumers and regulated firms, and its service is free for consumers. Complaints must relate to agreements taken out on or after July 15, 2026, and involve a regulated firm. Customers should first complain to their BNPL provider; if unsatisfied, they can escalate to the FOS.
Steps for Those Worried About Debt
Charity StepChange advises pausing before using BNPL to consider whether the purchase would be made without credit. Keeping a record of payments and terms helps ensure the loan fits within your budget without cutting essentials. Those struggling should contact their lender or seek free advice from organisations including StepChange, Citizens Advice, Christians Against Poverty, and National Debtline.
