Business & Finance
New BNPL Rules Could Block Purchases If Affordability Checks Fail
If you have used a Buy Now Pay Later service since the summer, you have been subject to new affordability checks. BNPL has always been a type of loan paid back in instalments, but it has only been officially regulated since July. The regulation requires lenders such as Klarna and Clearpay to obtain regulator approval, giving shoppers more access to refunds and independent complaint resolution. It also introduces stricter background checks on each transaction. If you fail an affordability check, the purchase will be blocked.
The new rules apply different affordability checks depending on the amount borrowed. With the festive season approaching, the regulator warns that consumers may be blocked from services for the first time.
To avoid being blocked, debt adviser Sara Williams, who posts as Debt Camel on social media, suggests: 1. Slow down your purchases and consider whether they are essential. 2. Be careful about buying items that require a high credit limit, such as multiple clothing sizes. 3. Cancel subscriptions that may force you to use BNPL to cover previous payments. 4. Seek help from debt charities and access food bank vouchers if you are using BNPL for essentials.
If you are struggling to repay any loan, including BNPL, you should seek help before the situation worsens. The government‑backed MoneyHelper website offers a guide to finding free debt advice, tools to list what you owe, check eligibility for benefits and grants, and a bill prioritiser to decide which payments to make first and what to do if you miss a payment. Be wary of debt solutions advertised on social media.
Related topics – Published 12 October – Published 19 October