New protections confirmed for Buy Now Pay Later borrowers – what you need to know

Borrowers using Buy Now Pay Later (BNPL) schemes will benefit from stronger protections from this summer, under new Financial Conduct Authority (FCA) rules.

BNPL is a form of credit that allows customers to purchase items and repay a lender using instalments.

There are currently no protections in place for customers using BNPL regularly who might not be able to afford it.

Firms will need to register with the FCA by 15 July 2026 to continue providing BNPL agreements.

What do the rules mean for customers?
Under the new rules, BNPL will be subject to Consumer Duty, which was created to give customers a higher standard of protection.

From 15 July 2026, BNPL providers must be FCA-authorised and provide:

• Clear information: give customers clear, upfront details about the BNPL agreement, including when payments will be due, amounts and what happens if they miss payments
• Affordability checks: lenders will have to carry out checks to make sure customers can afford to repay what they borrow before offering BNPL
• Notification if you miss a payment: providers must explain what you owe, the consequences of missing repayments and how you can resolve the situation
• Support when needed: lenders must offer support to customers in financial difficulty and, where appropriate, give them free debt advice
• Section 75 protection: providers will be jointly liable with the retailer if anything goes wrong with purchases costing between £100 and £30,000 from 15 July 2026 onwards. (Purchases made before this date won’t be protected)
• Complaints and compensation: if something goes wrong, customers will be able to complain to the Financial Ombudsman Service.

Should you use BNPL?
As with all forms of credit, it’s important to understand the potential risks of using BNPL schemes.

While BNPL can offer the opportunity to split payment for items over a longer period, you must ensure that you can afford the repayments.

Late or missed payments can result in charges or interest being added to what you could make, which could make it more expensive and unaffordable.

Failing to keep up with repayments could also negatively impact your credit history and make it more difficult to borrow in the future.

If you’re concerned about affording your repayments, get in touch with the lender as soon as possible to explore the option of an affordable payment plan.

Contacting a free debt organisation such as Citizens’ Advice or Step Change can help you access tailored expert advice for your individual circumstances.