Buy now, pay later protection one step closer – but Martin Lewis urges caution as rules not yet in force
New rules to protect over 10 million shoppers who use buy now, pay later (BNPL) services are on the way to becoming law. However, MoneySavingExpert.com (MSE) founder Martin Lewis, who has long-campaigned for BNPL regulation, is urging people to remain wary until the law changes take force.
The Government will today (Monday 19 May) introduce legislation in Parliament to regulate BNPL products under law. This new regulatory regime is expected to take effect in mid-2026 with financial services regulator, the Financial Conduct Authority (FCA), enforcing the rules.
However, exact details still need to be consulted on. This includes reforming the Consumer Credit Act – a law designed to protect borrowers when taking out credit – in a bid to update it with the new ways consumers access credit digitally.
Martin Lewis: 'We're finally sneaking closer to regulation... but people should still maintain a level of wariness'
We're finally sneaking closer to the long overdue, much needed, consumer protection that regulation of buy now, pay later (BNPL) will bring. BNPL is now ubiquitous at online checkouts, many people don't realise it is a form of debt – and that if things go wrong it can mess up their financial lives.
This isn't about knocking BNPL, it's about making it safer. BNPL can be useful, allowing those who need to spread payments for a budgeted, necessary purchase, such as a plumber, to do it interest-free. Yet it's been sold as a lifestyle choice, not a debt, and pushed for instinct buys or even takeaways. Too many are in trouble with multiple BNPL repayments, leading to debt-chasing and credit file damage.
Regulation will mean firms must be overt that it's a debt, have proper affordability rules, and will crucially let people go to the Financial Ombudsman Service if things go wrong. Yet it's not coming in until 2026, so people should still maintain a level of wariness until then.
BNPL one step closer to becoming regulated – here's what it means for shoppers
Key changes put forward by the Government, which are now in the process of becoming law, include BNPL providers needing to:
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Give clear and accessible information about the risks involved. This should enable you to make fully informed decisions before using BNPL services.
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Run affordability checks on shoppers. Firms will have to check that you can afford to make repayments.
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Give powerful Section 75 protection on purchases made using BNPL. This would apply to items costing over £100 but not more than £30,000, as it does for credit cards currently. It means the BNPL provider will be jointly liable with the retailer if anything goes wrong.
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Allow users to take complaints to the Financial Ombudsman Service. If you complain to a BNPL firm and don't get anywhere, you'll be able to escalate your complaint to the independent arbitrator, which can officially determine whether you've been treated fairly. This should make it easier to get a refund if you're entitled to one.
Martin and MSE have long called for regulation
Martin and MSE, alongside other campaigners, have long called for the BNPL market to be regulated. In February 2021, the then Conservative Government announced that regulation would be implemented. However, despite renewed calls for action, the last Government never put the regulation in place.
Then in October 2024, the new Labour Government launched a consultation outlining its plans for regulating the BNPL market, which will today be introduced to Parliament.
To read more on our calls for regulation, see our BNPL Campaigns blog. For more on using BNPL schemes responsibly, check out our buy now, pay later guide.
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17 June 2025
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