Martin Lewis: plans to regulate buy now, pay later won’t protect people for the 'financially bleak winter coming'

Today (Monday 20 June), Her Majesty’s Treasury is announcing plans to regulate buy now, pay later (BNPL) products in its response to its 2021 consultation on the issue. But the pace of progress is painfully slow – the Government says another consultation on draft legislation is to come later this year and that it is aiming to bring legislation forward in ‘mid-2023’.

Martin Lewis, founder of (MSE) said: "Buy now, pay later regulation is desperately needed, so my pleasure that it’s finally to happen is tempered by frustration at how long it is taking. It’s now nearly two years since we raised the alarm about BNPL’s explosive growth and called for urgent regulation to ensure proper checks are in place, and that people can go to the Financial Ombudsman when there are problems. Yet those protections still won’t be in place for the financially bleak winter coming.

"Buy now, pay later is often insidiously marketed as a simple payment option, or worse, a lifestyle choice. It’s not. It’s a debt, with all the dangers of debts. It perverts purchasing decision-making, leaving many in a continuous loop of owe-owe-owe.  Firms make money from it because people transact more via BNPL than they would otherwise. 

"Debt shouldn’t be something you slip into, it must be an informed, active, conscientious choice. While in some cases BNPL can be a legitimately cheap way to spread the cost, amidst a cost of living crisis, people should always first ask themselves: ‘if I can’t afford to pay for it now, how will I afford to pay for it next month?"


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