New Buy Now Pay Later rules

Key Points:

• New Buy Now Pay Later (BNPL) regulations, effective since July, require lenders like Klarna and Clearpay to conduct stricter affordability checks before approving purchases, potentially blocking transactions if repayment ability is doubtful.
• BNPL providers must now have regulator approval, which enhances consumer protections such as access to refunds and independent complaint resolution.
• To avoid being blocked or having borrowing limits reduced, consumers are advised to slow down non-essential purchases, limit high credit use, cancel subscriptions, and seek help from debt charities if relying on BNPL for essentials.
• Those struggling with loan repayments should seek free debt advice via resources like the government-backed MoneyHelper website, which offers tools for budgeting, benefit checks, and payment prioritization.
• Consumers are cautioned to be wary of dubious debt solutions advertised on social media and to manage their debt proactively to prevent financial difficulties.