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Landers specializing in “Buying Now, Pay later” services will have to respect the same rules as traditional banks under the long -awaited legislation which will make them fully regulated by the Financial Conduct Authority.
The British government will bring legislation on Monday, more than four years after the previous conservative administration has announced its intention to regulate the sector.
Under rules, lenders such as Klarna And Clearpay will have to check the affordability of buyers before offering loans, while borrowers will be able to file complaints from the financial mediator.
“These new rules will protect buyers from debt traps and give the sector the certainty he needs to invest, develop and create jobs,” said Emma Reynolds, economic secretary of the Treasury.
“Buy now, Pay later transformed purchases for millions of people, but for too long, worked like a West West – leaving exposed consumers.”
The Treasury said that he would also reform the Consumer Credit Act in order to create a “modern and pro-corporate framework which reflects the way people are taking today”. THE financial technology The industry has long complained that the 51 -year -old regime and some of its disclosure requirements were not adapted to the digital age.
The loan market “Buy now, paying later” – known as BNPL – has exploded in recent years, allowing consumers to spread their payments in short -term payments. According to the Treasury, more than 10 million people use the product in the United Kingdom.
However, the sector has remained unregulated, providers are not currently to carry out checks to the affordability of potential users. Consumer groups have warned that borrowers are likely to accumulate unmanageable debt levels of late reimbursement fees as part of the current regime.
Lisa Webb, of the consumer group who?
The research commissioned by the Center for Financial Capability, a charitable organization in financial education based in the United Kingdom, revealed that almost a quarter of these loans had been charged late reimbursement fees in the six months until December 2023.
Klarna, one of the main suppliers, said: “BNPL without interest is an important alternative to high cost credit for millions of British and we have taken care of the regulations to keep it safe and accessible since 2020.”
He added that it was “good to see progress in the regulations, and we are impatient to work with the FCA on the rules to protect consumers and encourage innovation”.
The United Kingdom announced its intention to regulate the sector in 2021 and the Treasury consulted the idea in 2023, but then delayed the implementation of a bill.
