Auto Amazon Links: No products found. Blocked by captcha.
Kevin Peachey, a Cost of Living Correspondent, discusses the upcoming stricter affordability checks for shoppers using buy now, pay later (BNPL) services. These new rules will be enforced starting next July, potentially leading to some shoppers being denied this form of credit. The intention behind these regulations is to prevent individuals from accumulating excessive debt and falling victim to late payment fees. Nurse Julie Rowbottom shared with the BBC her experience with BNPL, emphasizing how convenient it can be but also highlighting the risks of quickly accumulating debt if not managed carefully.
BNPL services offer interest-free credit to shoppers, allowing them to make immediate purchases and repay the amount in 12 or fewer installments within a year. Major operators like Klarna and Clearpay have gained popularity in the UK, being accepted as a payment option by numerous retailers. The Financial Conduct Authority (FCA) estimated that around 11 million UK residents utilized BNPL services in the past year, with a significant portion of individuals aged between 25 to 34 engaging in such transactions. Moreover, the common uses for BNPL were identified as “lifestyle and beauty purchases” and “treating myself or other people”.
Various charities have advocated for increased consumer protection within the BNPL sector due to rising instances of financial distress. The proposed regulations aim to initiate checks on affordability, ensure prompt refunds for consumers, and establish avenues for complaints to the Financial Ombudsman. Although it is projected that consumers will collectively save £1.8 billion over a decade as a result of these measures, providers’ profits are anticipated to decrease by £1.4 billion due to reduced transactions. The FCA intends to grant lenders autonomy in implementing the new rules, including affordability assessments, with the objective of aiding consumers in making informed decisions regarding their financial well-being
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.