Sunday, July 21, 2024
Sunday, July 21, 2024
Home » UK Watchdog Intervenes Again in ‘Buy-Now-Pay-Later’ as Users Rise

UK Watchdog Intervenes Again in ‘Buy-Now-Pay-Later’ as Users Rise

by Theo Atkinson
0 comment 77 views

Britons are turning to unregulated “buy-now-pay-later” credit in ever increasing numbers to pay their bills, the Financial Conduct Authority said on Tuesday, in the latest sign of how the country’s cost of living crisis continues to bite.

Companies that offer “buy-now-pay-later” (BNPL) unsecured loans are not regulated by the FCA, though it has used Britain’s consumer rights law to make contracts fairer.

The government set out draft legislation in February to regulate the business.

The watchdog said its latest Financial Lives survey showed that 27% of UK adults or about 14 million people, have used BNPL at least once in the six months to January 2023, up from 17% in the 12 months to May 2022.

Since then, Bank of England interest rates have risen further, making credit more expensive.

BNPL is offered over a short period to shoppers who buy to clothes or other retail goods. Frequent users were more likely to be in financial difficulty and to have missed a payment of a bill or credit commitment, the FCA said.

The regulator said it was concerned that PayPal and QVC customers were at risk of harm because of how some of the contract terms were drafted.

“As a result of the FCA’s continued focus in this area, both firms have voluntarily made their continuous payment authority terms easier to understand – and PayPal has made terms relating to what happens when a consumer cancels the purchase funded by the loan clearer and fairer,” the FCA said in a statement.

“When used appropriately, the product provides valuable benefits, but we want to ensure that consumers, particularly those in vulnerable circumstances, have adequate protections and are given sufficient information,” said Sheldon Mills, FCA executive director for consumers and competition.

Source : Reuters

You may also like

Yew Media is a global leader in the online news. We seek to inform and engage with our readers. Staffed 24 hours, seven days a week by a dedicated team around the globe, we deliver news from journalists around the world. We are contrarian truth-seekers and truthtellers. We are journalists united by a mission to inform and engage with our readers. We bear witness to history as it unfolds and explain not just what happened, why it happened and what it means to our readers and the public. We are contrarian, we are committed to the news, speaking truth to power.

Yew Media, A Media Company – All Right Reserved.