Martin Lewis calls for 'explosive' buy now pay later market to be regulated at 'maximum speed'
Martin Lewis has called for the "explosive" market for buy now, pay later products to be regulated as soon as possible in a Treasury Committee evidence session this week.
Update 2 February 2021: HM Treasury has confirmed plans to regulate buy now, pay later firms following the publication of the Financial Conduct Authority's 'Woolard Review', which also called for this. See Buy now, pay later firms to be regulated – and all shoppers will face affordability checks for more info.
The MoneySavingExpert.com founder highlighted that buy now, pay later products - which let you spread the cost of buying something over weeks or months - are now the fastest growing form of credit in the UK and could soon be the dominant type of credit used.
He said: "My issue is just like with payday loans, [when regulators come to act] it will be too late. We're in the explosion of this form of credit today. This is absolutely huge. It is a massive form of credit that is unregulated without controls... and I would call for maximum speed to move this into a regulatory environment."
You can watch a snippet of what Martin said to the Treasury Committee below (or watch the full session on the Parliament website):
'Action needed in two months'
Martin explained to the cross-party group of MPs in the meeting that though these products can work when used correctly, as they aren't regulated borrowers don't have an ombudsman to go to if something goes wrong. He warned that action is needed in two months, not two years.
The fact these products are being marketed towards the under-30s - particularly by so-called influencers on Instragram - is also worrying, said Martin, and he said there is a danger the sector could be overlooked by policymakers.
Martin also flagged that these products are becoming so ubiquitous when shopping online that people could have taken them out without even realising.
See our Buy Now, Pay Later guide for more info on how these products work and what the dangers could be.