CLEARPAY customers have lashed out at the lender after finding their accounts have suddenly closed – due to tough new regulations on Buy Now Pay Later providers.

It comes after new laws were introduced to bring Buy Now Pay Later (BNPL) firms in line with other lenders such as banks and credit card companies.

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They now need to carry out tougher affordability checks before offering credit, resulting in some existing users being blocked from Clearpay.

One surprised customer wrote on a Facebook support group: “After using Clearpay for years and having got my limit of £1,500 they have closed my account…

“I use this regularly and am quite upset that they have done this after using it for years.”

Another added: “I’ve had the account for years and not missed any payments. I’ve been a loyal customer… it’s ridiculous and unfair for them to do this without contacting me with a reason why.”

Others also complained of a lack of communication about the closure of their accounts.

Clearpay did not comment, but it’s understood the accounts were shut following affordability checks due to the new Financial Conduct Authority (FCA) regulations, and outstanding balances will be written off.

Providers including Clearpay and Klarna often appear as options at online checkouts and enable people to spread the cost of purchases in instalments – a method known as “deferred credit” which has previously been unregulated. 

From July 15, all BNPL firms must conduct affordability checks before every transaction to ensure the borrower can easily pay off the debt. 

The new rules will also force them to support those in financial difficulty, as well as be upfront about when payments are due and what happens if you miss one.

A Klarna spokesperson said: “Klarna’s called for regulation since 2020, so this is a moment we welcome. The FCA’s rules closely reflect what we’ve long asked for, and they largely formalise what we already do.

“For most of our 12 million customers in the UK, the way they use Klarna won’t change and they’ll gain new protections like Section 75 cover and Ombudsman access.

“We already run affordability checks, show costs up front and report to credit reference agencies.

“Interest-free BNPL helps people avoid other kinds of high-interest, long-term debt that damages their financial wellbeing, and regulation is good news for consumers.”

But some shoppers claim deferred credit has led to easy spending, with one user claiming on Facebook he had splurged £30,000 in three years using Clearpay.

He added: “Clearpay is a godsend for many people when it comes to birthdays, Christmas and even weekly food shops! But for some, like me, it is just another way to encourage emotional spending,” 

Not all BNPL providers work in the same way.

Zilch, for example, operates more like a traditional credit card and was already regulated by the FCA, so is not directly impacted by the changes.

The lender Affirm has also always been regulated by the Financial Conduct Authority (FCA) due to offering interest-bearing, longer-term loans.

Around 5.3 million people had outstanding BNPL balances in July 2025, according to the FCA.

Of this group more than 1.1 million people had more than £500 of active BNPL debt.

Rules may push people to ‘black market lenders’

But experts have warned the new rules fail to protect those who have already fallen into debt from unregulated firms, as customers won’t be able to complain retrospectively.

Consumer champion Martyn James explains: “The regulations won’t be retrospective, so they will only kick in for agreements signed on or after the commencement of the new rules.”

He also fears that without access to cheap credit, people could be pushed towards illegal money lending.

“It’s likely that more people will be turned down. I worry about them being forced into the arms of black market lenders,” he adds.

For example, there is a risk people could turn to loan sharks, who target vulnerable people and charge eye-watering interest rates.

An FCA spokesperson said: “We want people to be able to access credit they can afford. We’ve proposed sensible checks that’d help borrowers avoid unmanageable debt.

“If people are struggling with their finances, they should contact MoneyHelper or a debt advice charity who are there to provide advice and support. No one needs to deal with financial difficulty alone.”