Some Clearpay customers have reportedly had their accounts unexpectedly closed ahead of the Financial Conduct Authority (FCA) taking over regulation of the Buy Now Pay Later (BNPL) sector on July 15. Social media users claim their accounts were shut without prior warning, even after years of use, and outstanding balances are being written off, according to The Sun.
FCA to Regulate BNPL from July 15
The FCA will officially begin regulating BNPL providers including Klarna, Clearpay, and PayPal from July 15, bringing their deferred payment products under the Consumer Duty umbrella. This means BNPL firms must be authorised by the FCA and comply with stricter consumer protection rules, including mandatory affordability checks before purchases are approved. Lenders will need to assess whether customers can realistically afford repayments before extending credit.
Stronger Consumer Protections
Consumers will benefit from clearer information about payment schedules, the consequences of missed payments, and the total amount owed, the FCA said. Providers must also offer support to borrowers in financial difficulty and direct them to free debt advice services. Customers will gain access to the Financial Ombudsman Service if disputes arise.
Sarah Pritchard, deputy chief executive at the FCA, said: 'We want the Buy Now Pay Later sector to thrive – it provides an important source of credit to many – and we will continue to support firms who want to develop innovative new products. But crucially, no one should be lent to if they're unable to repay, because that could worsen their financial situation. Now Parliament has given us the powers, we’re putting in place proportionate protections for the 11 million people who use it.'
Account Closures and Affordability Checks
It is understood that the Clearpay account closures followed affordability checks required by the new FCA regulation. The FCA noted that BNPL provides an important credit source but currently lacks protections for repeat users who may not afford it. The regulation aims to help people 'navigate their financial lives, with appropriate support for consumers.' The Daily Express has contacted the FCA and Clearpay for comment.
