HM Treasury said new rules have come into force that bring Buy-Now, Pay-Later products under Financial Conduct Authority regulation, aligning protections more closely with other forms of consumer credit. Providers must carry out affordability checks before offering credit, consumers buying faulty goods now have clear and enforceable refund rights, and customers who fall into financial difficulty should be directed to debt advice and support before being passed to debt collectors. The change affects a rapidly grown market used by millions of shoppers through providers such as Klarna, PayPal and Clearpay, where users had previously received fewer protections than people using credit cards or personal loans. The Financial Conduct Authority now oversees the sector, and the release said users will also be able to complain to the Financial Ombudsman Service if something goes wrong, alongside receiving clearer information to support informed borrowing decisions. HM Treasury said the move delivers the government's October 2024 commitment to regulate Buy-Now, Pay-Later, following legislation passed in July 2025 to enable the new rules to take effect in 2026.
HM Treasury2026-07-15
HM Treasury brings Buy-Now, Pay-Later under Financial Conduct Authority regulation with affordability checks and refund rights
HM Treasury said Buy-Now, Pay-Later products are now regulated by the Financial Conduct Authority, bringing them into line with other forms of consumer credit. Providers must carry out affordability checks, consumers gain enforceable refund rights for faulty goods, and users in difficulty should be directed to debt advice and support before debt collection. Users will also be able to take complaints to the Financial Ombudsman Service if problems arise.