Customers utilizing buy now, pay later services will soon be subject to enhanced protections starting in July, including affordability assessments and access to assistance in case of issues.
Starting July 15, 2026, the buy now, pay later sector will fall under the regulation of the Financial Conduct Authority (FCA). Users of these services will be required to receive transparent and comprehensive information about their agreements, detailing payment schedules, amounts due, and repercussions of missed payments.
Buy now, pay later lenders will be obligated to conduct affordability checks to ensure borrowers can repay their debts. Additionally, support services must be provided to customers facing financial difficulties, including guidance towards free debt advice resources.
Users of buy now, pay later platforms will have the option to escalate complaints to the Financial Ombudsman Service (FOS) if they feel unfairly treated. Lenders must obtain authorization from the regulator and adhere to Consumer Duty regulations, which elevate consumer protection standards in UK financial services.
The buy now, pay later industry, which reached £13 billion in 2024 according to the FCA, facilitated transactions for 10.9 million adults in the twelve months leading up to May 2024. Sarah Pritchard, FCA’s deputy chief executive, emphasized the importance of responsible lending practices to prevent worsening financial situations.
Peter Tutton, from StepChange Debt Charity, highlighted the benefits and risks associated with buy now, pay later services, urging users to ensure affordability of repayments and seek assistance if needed. The FCA’s move to introduce protective measures aims to safeguard the millions of individuals using such credit options.