Stories

Tue, 14 Jul 2026

Tue, 14 Jul 2026 Buy Now Pay Later rules to bring refunds and rejections

Consumers should be better protected as Buy Now Pay Later lenders now require authorisation to operate.

* New rules have come into effect from Wednesday, regulating Buy Now Pay Later (BNPL) services and giving shoppers more access to refunds and independent rulings on unresolved complaints.
* BNPL lenders must now have regulator approval to operate, bringing them in line with credit card providers and banks offering loans.
* Customers can refer new unresolved complaints about BNPL services to the Financial Ombudsman Service for independent adjudication.
* Consumers can claim for refunds and compensation for faulty goods costing more than £100 from the BNPL provider.
* Shoppers must pass an instant and automatic test that they can repay the loan, or the purchase via BNPL will be blocked.
* Borrowers must get clear upfront information about the loan, including what happens if a payment is missed, and be directed to free debt advice if they are in financial difficulty.
* Regulators aim to prevent people from taking on too much debt by splurging on unaffordable purchases, but some BNPL users may be refused loans due to affordability checks.
* It's estimated that 10-30% of BNPL users will fail these conservative affordability checks, which could leave many unable to buy essentials.
* Debt charities have welcomed the changes, but are urging people to pause before buying anything via BNPL and consider whether they would have bought it even if it wasn't available on credit.