Charities have made repeated demands for extra protection, after seeing increasing numbers of people get into financial trouble.<\/p>\n
Vikki Brownridge, chief executive of StepChange Debt Charity, described the new proposals as “a significant step forward” in bringing the sector in line with other types of credit.<\/p>\n
“Buy now, pay later users are twice as likely as all credit users to borrow to cover essential bills, and our research also found that BNPL is now as common as using an overdraft amongst UK adults,” she said.<\/p>\n
In recent days legislation has passed which means the FCA can now consult on its plans to regulate the sector – after years of promises from politicians to control the “wild west” of lending.<\/p>\n
The plans should lead to upfront checks on affordability, as well as faster access to refunds for consumers, and the right to complain to the Financial Ombudsman.<\/p>\n
It should also lead to clear information about cancellation rights, charges and any impact on credit ratings if a payment is missed.<\/p>\n
Over 10 years, regulators estimate consumers will be \u00a31.8bn better off as a result, while providers’ profits will drop by \u00a31.4bn owing directly to fewer transactions.<\/p>\n
But it said it wanted to give lenders “flexibility” over how they applied the new rules, including affordability assessments.<\/p>\n
That could see different lenders using different ways to test if people can cover the repayments.<\/p>\n
Alison Walters, interim director of consumer finance at the FCA, said: “We are not prescribing how firms do it, because digital journeys will vary. But the firms must carry out an affordability check to ensure that consumers can afford to repay that borrowing.<\/p>\n
“Credit is not right for everybody. There will potentially be consumers who will not be able to access this product and firms can signpost them to other support like debt advice.”<\/p>\n","protected":false},"excerpt":{"rendered":"Charities have made repeated demands for extra protection, after seeing increasing numbers of people get into financial trouble.…\n","protected":false},"author":2,"featured_media":270811,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,16,15],"class_list":{"0":"post-270810","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114871704224184643","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/270810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=270810"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/270810\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/270811"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=270810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=270810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=270810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}