A LEADING consumer champion has urged millions of shoppers to rethink how they use Buy Now, Pay Later (BNPL) services, as new Financial Conduct Authority (FCA) rules bringing stronger protections to the sector come into force.
Jane Hawkes, founder of the Lady Janey blog, said Buy Now, Pay Later had become a normal part of the checkout for millions of shoppers, but many hadn’t realised they were taking on a form of borrowing.
The changes – which kicked in last week mean providers of previously unregulated BNPL products will now be regulated by the FCA, bringing in safeguards designed to help consumers borrow responsibly and receive better protection if problems arise.
The new rules include affordability assessments, clearer information before borrowing, support for customers experiencing financial difficulties, and access to the Financial Ombudsman Service for eligible complaints.
Existing agreements taken out before July 15 will generally not be covered by the new regime.
Ms Hawkes said: “These new protections are a welcome step because they bring BNPL much closer to the standards consumers already expect from other credit products.
“The biggest change is that lenders will have to take greater responsibility for making sure borrowing is affordable, while customers will have clearer information about what they’re signing up to and better support if things go wrong.”
However, she warned the new rules shouldn’t give shoppers a false sense of security. “Buy Now, Pay Later is still debt,” she said.
“Just because repayments are spread over several months doesn’t mean the purchase is affordable. Before clicking ‘Pay in 3’, ask yourself one simple question: would I still buy this if Buy Now, Pay Later wasn’t available?”
Ms Hawkes said the reforms were an important step forward, but urged caution against treating BNPL as “free money”.
“The changes are good news for consumers because they finally bring much-needed protections to a form of borrowing that has become part of everyday shopping,” she said.
“However, while the rules offer greater safeguards, they don’t remove the need to borrow responsibly.”
She added that used sensibly, BNPL could be a useful budgeting tool, but used carelessly, especially across multiple retailers, it could quickly become difficult to keep track of what’s owed.
“The best protection is still making sure every repayment fits comfortably within your monthly budget.”
Hawkes claims many people have several BNPL agreements running at the same time, making it easy to lose track of future repayments.
“The convenience of splitting payments can encourage impulse purchases that simply wouldn’t have been made otherwise. The golden rule is to treat Buy Now, Pay Later exactly as you would any other loan. If you wouldn’t feel comfortable paying the installments from next month’s income, think carefully before committing.”
She continued: “The simplest budgeting trick is to add all your BNPL repayments together each month. Many people underestimate how much they’re already committed to.”
Jane’s top tips for using Buy Now, Pay Later:
- Remember that BNPL is borrowing, not a discount
- Check exactly when repayments will leave your account
- Avoid having multiple BNPL agreements running at once
- Set calendar reminders or direct debits so you don’t miss payments
- Make sure every repayment fits comfortably within your monthly budget
- Read the terms before agreeing, especially around missed payments and late fees where applicable
- Keep a record of all outstanding instalments so you know your total commitments
- If you’re already struggling financially, avoid taking on additional borrowing and contact your lender early if you think you’ll have difficulty making repayments
