New Buy Now Pay Later rule change coming to 'protect' shoppers
A major Buy Now, Pay Later update has been issued for millions as a huge rule change looks to protect shoppers. The planned change under the new Labour Party government is set to be introduced and will happen within months.
Labour has confirmed that it intends to bring the Buy Now, Pay Later (BNPL) sector under the City watchdog's rule by early 2025. In an exclusive interview, economic secretary to the Treasury Tulip Siddiq told The Sun that the Government has now finalised its "bespoke" plans and intends to pass the legislation "as soon as possible" in early 2025.
"The whole government is really behind this policy - the chancellor is really keen on it - because we don't want a situation where people are trying to manage their debt and end up making it worse, which is what's happening now," Ms Siddiq said.
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"But, we don't want to get rid of BNPL, as there is a need in the market for it." Firms will have to operate in consumers' best interests - or face FCA enforcement action. Firms will have to carry out strict affordability checks, too. Shoppers will be able to complain to the Financial Ombudsman Service (FOS) if they feel they've been treated unfairly, Labour has also confirmed.
"Firms will be under the supervision of the FCA who can bring enforcement action [against them] if we feel they are not treating consumers right or don't have the consumers' best interests at heart," Ms Siddiq told The Sun.
"This supervision means there are certain rights consumers will have in terms of referring a complaint to the Financial Ombudsman Service (FOS), which you can't do at the moment," Ms Siddiq explained. Firms will largely have to adhere to the Consumer Credit Act, too, Labour has confirmed ahead of the shake up in the UK.