Millions of shoppers relying on buy now, pay later schemes to get stronger protections under new rules coming next year

Scottish Sun

3 days ago

Scroll to find out why Visa and Mastercard face a multi-billion-pound class action lawsuit - and who could benefit
LEND US A HAND Millions of shoppers relying on buy now, pay later schemes to get stronger protections under new rules coming next year
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MILLIONS of shoppers who rely on buy now, pay later schemes will gain stronger protections under new rules launching next year.
For the first time, the short-term financing — known as BNPL — will be regulated by the Financial Conduct Authority (FCA).
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Lenders will be forced to check if borrowers can afford repayments and offer support if they fall behind.
BNPL allows shoppers to spread the cost of goods without interest, but rising debt has caused concern.
FCA research reveals 20 per cent of UK adults used BNPL last year, with many owing hundreds in unregulated debt.
But from next July, firms must carry out strict affordability checks and explain repayment terms clearly.
Shoppers will be told upfront about fees, missed payment consequences and credit score impacts.
If borrowers hit financial trouble, lenders must step in with tailored support and advice.
Complaints can also be escalated to the Financial Ombudsman Service, offering fair resolutions for disputes.
It brings BNPL under Section 75 of the Consumer Credit Act, allowing shoppers to claim refunds or compensation for faulty goods from lenders if retailers fail to deliver.
Sarah Pritchard, deputy chief executive at the FCA, said the regulation would allow consumers to 'make informed decisions'. Market leaders Clearpay and Klarna support the move.
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But from next July, firms such as Klarna, must carry out strict affordability checks and explain repayment terms clearly
Credit: Getty
Klarna's new shopping app that lets you pay in three instalments at any retailer explained
FIRMS' CARD COMPO BID
VISA and Mastercard face a multi-billion-pound class action lawsuit over allegedly unlawful card payment fees, in one of the largest competition claims.
Businesses accepting their debit or credit cards could secure compensation for unfair multilateral interchange fees (MIFs), described as a 'tax on business' by Stephen Allen, director of the class representatives.
MIFs make up about 90 per cent of monthly service fees.
The claim, funded by Bench Walk Advisors, covers fees charged since 2019 and is open to all UK businesses.
£15M 'JET RAP
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EasyJet boss Kenton Jarvis has slammed French air traffic strikes after £15m disruption and passenger chaos
Credit: Splash
EASYJET boss Kenton Jarvis has slammed French air traffic control strikes for causing disruption and £15million in extra costs.
This month's walkouts affected thousands of passengers. Mr Jarvis urged the French government to improve air traffic operations, recruitment and technology.
Despite challenges, easyJet recorded a £286million pre-tax profit for the quarter, driven by strong demand and resilience.
WE DUN WELL
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Dunelm sales are up 3.8% as shoppers splash out despite tight budgets
Credit: Reuters
DUNELM has reported a 3.8 per cent rise in annual sales, with summer demand strong despite pressure on household budgets.
Seasonal ranges, including outdoor living products, performed well. But the firm still warns of no clear recovery in consumer confidence.
Pre-tax profits for 2025 are expected to hit £210million, in line with forecasts.
Its shares rose by 1.5 per cent, with analysts highlighting its digital investments.