Scrapping buy now, pay later regulation would spell disaster, say UK’s biggest consumer organisations

Citizens Advice, MoneySavingExpert and Which? team up to renew calls for Government to urgently protect BNPL users 

The UK’s three biggest consumer groups have teamed up to again plead with the Government to urgently protect buy now, pay later (BNPL) users. The new laws, which were long planned and expected to be in place by now, seem to have been pushed into the wilderness – with little being said, but reports and strong rumourssuggesting the Treasury may can plans to regulate entirely. This would leave consumers without vital safeguards on purchases and protection from unsustainable borrowing (1).

It’s been two and a half years since the Government promised to regulate BNPL as a priority (2). It got the regulator to prepare, it drafted the laws, published them and consulted on them – all that was left was to put those laws through Parliament. Now it has all gone quiet. In the meantime, regular BNPL users are now as much as four times more likely to have dangerously unmanageable debt from this and other credit products.

Citizens Advice, MoneySavingExpert (MSE), Which? and many others have long called for urgent regulation of BNPL due to its explosive growth. Citizens Advice research has found that 37% of UK adults have used BNPL in the last 12 months - up 37% since 2021 (3). One in six people using BNPL are behind on payments, and that figure rises to over one in three for those on Universal Credit (4).

All three organisations are today saying that to stop or delay regulation would be disastrous – it needs to happen now to prevent more falling into financial hardship. They, along with a coalition of supporters, sent a joint letter to the Chancellor in July urging him to press ahead – that letter remains unanswered.

New research by the Financial Conduct Authority found that frequent users of BNPL are more likely to be in financial difficulty. Consumers who have used BNPL more than 10 times were:

  • over twice as likely as those who have not used BNPL to also have a high-cost credit product (48% vs. 22%),  
  • almost twice as likely to have increased the amount of debt on credit products over the last year (51% vs. 27%), and  
  • over four times as likely to have missed a payment of a bill or credit commitment in three of the last six months (27% vs. 6%).

Martin Lewis, founder of, said: "The Government hasn’t said it’s doing a u-turn, but it’s hard not to hear the screech of the handbrakes and the yank of the steering wheel. I desperately hope the Government won’t be yankers though, this regulation is needed, and needed soon.  

"BNPL, used right, can be a decent way to spread the cost of planned purchases. Yet too often people sign up without realising it is a DEBT, what happens if they can’t pay, or take it on when it’s unaffordable. Regulation was so close we could taste it – the Ts just needed crossing, and the Is dotted. Yet now we’re facing another Christmas, amidst a cost of living crisis, when people under financial pressure are tempted to borrow, and to spend, by this ubiquitous form of debt-payment.

"The industry says the credit laws are imperfect. They’re right. They’re imperfect for all other debts too – but they’re far better than nothing. And BNPL is a debt – it needs controls and regulation. Crucially, that’d ensure it’s promoted correctly, and would give people a legal right to go to the Ombudsman when it goes wrong. I’d welcome better rules, but they take time, so let’s get the current regulations in place, then all work together to make them better."

Dame Clare Moriarty, Chief Executive of Citizens Advice, said: "The cost-of-living crisis continues to have a vice-like grip on people’s budgets, with many being squeezed beyond breaking point.

"Under such pressure, it’s hardly surprising more and more consumers are turning to quick, all too often unaffordable credit options like Buy Now Pay Later (BNPL). In fact, there’s been a 37% jump in its use since 2021, and we only expect this to increase (3).

"While BNPL can be a good option for some, our message is clear: unaffordable credit is never the answer. The government must act on its pledge to bring the BNPL market into line."

Rocio Concha, Which? Director of Policy and Advocacy, said: "Buy now, pay later can be a convenient way to pay for millions of consumers. However, a lack of information about the risks attached to using this payment method can mean some users are unaware that they are taking on debt. 

"It's now been two and a half years since the government promised to urgently regulate BNPL due to the harm it was causing consumers. With more people turning to BNPL to pay for essentials, that harm has increased. 

"Consumers using this payment method need proper protection – something even BNPL providers agree with. The Government must regulate BNPL immediately."

For more consumer help on BNPL, see:


Notes to editors

  1. Original Government plans, put into a draft Statutory Instrument, would have meant BNPL borrowers could imminently benefit from:
  • Clear and fair BNPL advertising that’s not misleading. Firms such as Clearpay, Klarna and Laybuy would have been formally required to follow existing advertising rules on financial promotions, which would have ensured that advertisements clearly showed how BNPL is a form of credit.
  • Powerful Section 75 protection on purchases made using BNPL. This would have applied for items costing over £100 but not more than £30,000, as it does for credit cards currently. It means the BNPL provider would have been jointly liable with the retailer if anything went wrong.
  • The right to complain to the FOS. Currently, the only way for most consumers to complain about BNPL firms is directly to the firm itself. However, regulation would have given consumers increased protections by enabling complaints to be taken to the FOS if the lender failed to respond or if complainants were unhappy with the response received. This would have aligned BNPL firms’ complaints procedures with those of traditional lenders.
  • Greater oversight of BNPL firms from the financial watchdog. Lenders offering BNPL would also have needed to be approved by the Financial Conduct Authority (FCA) in order to lend. Consumers would also likely have faced tougher affordability checks when taking out a new BNPL agreement.

It’s been reported that the Government wants to postpone regulation of BNPL until wider reforms to the Consumer Credit Act 1974 – which directs the rules for most regulated credit products, such as credit cards and loans – have been made. This process could take years.

Source example: Treasury poised to shelve crackdown on 'buy now pay later' sector, Sky News.

2. In a letter to the Financial Conduct Authority, former Economic Secretary to the Treasury John Glen said: “My officials are working with the FCA to assess the policy and legislative options for the Government to achieve a balanced and proportionate approach to regulation and I intend to take forward the necessary legislation as a matter of priority.”

3. Citizens Advice commissioned Opinium to undertake an online survey of 2,156 UK adults, to understand their use of Buy Now Pay Later and other credit products. The fieldwork was conducted between 1-3 November 2023. Responses were weighted to be nationally representative.

4. Data taken from the Citizens Advice Cost of Living Tracker, July 2023.