Wicked
£9.99The government has introduced new regulations aimed at safeguarding consumers who utilize buy now, pay later services, with the goal of putting an end to the unregulated borrowing environment known as the “wild west.” Lenders will now be required to conduct affordability checks to prevent individuals from accruing excessive debt, while shoppers will have quicker access to refunds under the new rules.
The popularity of buy now, pay later (BNPL) services has seen a significant increase in recent times, with approximately 11 million people in the UK having utilized them in the past year. However, concerns have arisen that some consumers may be overspending beyond their means without realizing the implications. Consumer advocacy groups have lauded the government’s move, emphasizing that many users are not fully aware that they are taking on debt that could prove difficult to repay.
Rather than making a full payment for a purchase upfront, BNPL allows shoppers to divide the cost into smaller installments over a short period, typically spanning weeks or months. While this method can be convenient for some individuals to manage shopping expenses, there are apprehensions that certain consumers may be entering into excessive debt. With BNPL products currently operating without regulation, the implementation of these new measures is seen as a critical step in enhancing protection for shoppers, as noted by Citizens Advice.
The new legislation set to come into effect next year mandates BNPL firms to adhere to standardized guidelines, ensuring that consumers are informed about the terms of their agreement, understand the affordability of their purchase, and know where to seek assistance if needed. Emma Reynolds, the economic secretary to the Treasury, stressed that while BNPL has revolutionized the shopping experience for many, it has also left consumers vulnerable to risks and operated in a regulatory void. By establishing these rules, she believes consumers will be shielded from falling into debt traps, allowing the sector to thrive and create employment opportunities
Read the full article from The BBC here: Read More
