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UK’s new BNPL rules to require upfront checks to assess borrower’s repayment ability, confer the right to complain to the Financial Ombudsman, and shifts the oversight to the FCA bringing BNPL in line with other credit products

May 20, 2025 //  by Finnovate

After years of wrangling, the UK Government is finally introducing new rules to clamp down on what it describes as the ‘wild west’ of buy now, pay later lending. Under the changes, millions of BNPL shoppers will gain stronger rights and clearer information as the Government reforms the 50-year-old Consumer Credit Act to better reflect modern borowing trends. That means upfront checks to make sure people can repay what they borrow, fairer and faster access to refunds, and the right to complain to the Financial Ombudsman — bringing BNPL in line with other credit products. The Government says outdated and confusing rules will be removed, with oversight shifting to the FCA. The legislative shift comes as a report by the FCA showed that one in ten people were unable to pay essential bills while millions more Brits were using buy now pay later products over the last three years. New figures from Money Wellness reveal a 68% increase in the number of people seeking help with BNPL debt in the past year, highlighting the growing strain the sector is placing on household finances. Sebrina McCullough, director of external relations at Money Wellness, says: “We’ve seen a significant rise in people struggling with Buy Now Pay Later debt, often because they’ve used it to plug gaps in everyday budgets. For many, it’s become a way to spread the cost of essentials like food shopping, rather than to cover large expenses. The legislation bringing BNPL into regulation will be laid in Parliament on 19 May.

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