BNPL has come into regulation – why we fought this hard-won campaign
After a long campaign, Buy Now Pay Later (BNPL) is finally regulated, giving you much-needed rights and protections.
After years of campaigning, buy now, pay later (BNPL) is finally regulated. This is a big win for the 11 million people who use these services each year. Here’s why it matters, what’s changed, and what we pushed for to make it happen.
BNPL lets you spread the cost of shopping over weeks or months, usually interest-free. It can be a useful tool for consumers when making spending decisions. But it is a form of debt that, until recently, came with almost no protection. Previously, if something went wrong or you were treated unfairly, you had no access to the Financial Ombudsman Service (FOS).
This left too many consumers at risk, so MSE fought hard to bring BNPL into regulation. We called for better standards across the board: to ensure BNPL adverts made it explicit that this was debt, and that the consequences of not keeping up with payments were made clearer when you signed up. Crucially, we were adamant that BNPL users must have access to the FOS and Section 75 protection – just like with other credit products.
After a long road, last year the financial regulator, the Financial Conduct Authority (FCA), announced that it would do just that – and these new rules finally bring consumer protection for BNPL more in line with other credit products. It is important to remember that regulation only applies to BNPL services taken out from 15 July 2026, so any existing BNPL agreements entered into before that date remain unregulated. Also note that it applies to lenders providing BNPL services to retailers (e.g. using Klarna on an ASOS order) but does not apply to retailers who offer BNPL services directly (for example, Very Pay by Very).
Buy now, pay later done right, isn't wrong. It's fine for those who understand what they're doing and make an active, one-off decision to use it to spread the cost over a few months interest-free.
Yet too many don't do that. They fall for BNPL's ubiquity, use it constantly and build up a bank of unaffordable debt. Worse, not everyone knows it's a debt. That is why it has been unsafe for some, and why I was one of those who campaigned strongly for the government to bring in this regulation, and why I'm delighted to see it happening now.
Most people won't notice any difference. These changes are primarily to ensure BNPL is sold responsibly and that there are protections for when things go wrong, which can be hugely damaging. These protections importantly include being able to appeal to the independent, free Financial Ombudsman Service over problems such as if your credit file is wrongly marked, or if BNPL has been mis-sold rather than properly explained as a debt.
What do the new rules mean for you?
From now on, BNPL lenders must:
Give you clear and accessible information about the risks involved with a BNPL agreement.
Run affordability checks on shoppers to check that you can afford to make repayments.
Contact you straight away if you miss a repayment and explain the consequences. If you're struggling or in financial difficulty, they'll also need to signpost you to free debt help services and consider offering forbearance (for example, giving you longer to pay or waiving fees).
Plus, you now have the following rights:
Section 75 protection on purchases made using BNPL. This means that the BNPL provider will be jointly liable with the retailer if anything goes wrong.
The ability to take complaints to the Financial Ombudsman Service.
This blog is specifically about MSE’s campaign to get BNPL regulated, but if you’d like more info on how it works, and whether it's the right way to borrow, head over to our BNPL guide.
A long road - how we got here
BNPL use exploded in the late 2010s, and so did the number of people exposed to the risks of unregulated credit. Our research in 2021 found that just over half of our 9,000 respondents felt in control when using BNPL services**.** Respondents experienced issues with BNPL customer services and complaints, resulting in negative effects on financial and emotional wellbeing. Many on low incomes struggled with repayments, having to cut back on essential spending to manage repayments.
We’ve spent six years engaging with the Government and regulators on this issue. From our first input into the Woolard Review in 2020 to commenting on the draft rules last September, MSE has responded to successive consultations always pushing for key protections. You can find those responses on our campaigns page. It was a long road to getting to where we are today, where BNPL is now regulated for new contracts.
While MSE is delighted to have won the campaign to regulate BNPL, we will continue to monitor the effectiveness of regulation, drawing attention to any gaps or improvements that could be made.
Share this guide?
