New Buy Now Pay Later Rules Bring Affordability Checks for Shoppers
Regulators are introducing affordability checks on Buy Now Pay Later services that could block some users from accessing the credit.
New regulations governing Buy Now Pay Later (BNPL) services are set to introduce mandatory affordability checks that could prevent some shoppers from using the popular short-term credit option, according to BBC News.
The changes represent a significant shift in how BNPL products — widely offered at online and in-store checkouts by providers such as Klarna and Clearpay — are overseen. Previously, these services operated largely outside the regulatory framework that governs traditional consumer credit, drawing criticism from consumer advocates concerned about debt accumulation among vulnerable users.
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Under the new rules, lenders will be required to assess whether borrowers can realistically afford repayments before approving a BNPL transaction. That means shoppers who have previously used the services without friction could find themselves declined, particularly if they carry existing debts or have a limited credit history.
Financial experts note that consumers can take steps to reduce the likelihood of being blocked, such as reviewing their credit reports, clearing outstanding balances ahead of planned purchases, and ensuring their financial information is accurate and up to date with credit reference agencies. Being proactive before a major purchase — rather than discovering a declined application at checkout — is advisable under the new landscape.
The regulatory overhaul is broadly intended to bring BNPL in line with protections already available to users of credit cards and personal loans, including the right to complaints handling through the Financial Ombudsman Service. Continue reading at BBC News.
