The UK government has announced plans to strengthen rules on ‘buy now pay later’ services, improving protection for users of the short-term credit.
The announcement is a response to a consultation that closed in January. It follows concerns raised around the model and consumer protection as the cost-of-living crisis deepens.
The government proposals, which will apply to other forms of short-term debt, will require lenders to carry out affordability checks on consumers and to be approved by the Financial Conduct Authority.
The plans will also amend financial promotion rules to ensure adverts are not misleading and allow consumers to take complaints to the Financial Ombudsman Service.
Economic Secretary to the Treasury, John Glen said: ‘Buy now pay later can be a helpful way to manage your finances but we need to ensure that people can embrace new products and services with the appropriate protections in place.
‘By holding buy now pay later to the high standards we expect of other loans and forms of credit, we are protecting consumers and fostering the safe growth of this innovative market in the UK.’
|Need help with your accounts? Please do not hesitate to contact us.|