Government officials are clamping down on the ‘buy now, pay later’ market with fresh regulations.
The move comes as the UK’s BNPL industry, estimated to be worth £6billion, continues to grow.
Clamping down: Lenders will be required to ensure loans are affordable for consumers, while advertisements must be fair, clear and not misleading
It has so far been unregulated, sparking concerns about consumers being encouraged to pay with money they don’t have, pushing them into debt.
The Treasury is introducing its first formal batch of rules specific to the sector’s interest-free credit arrangements.
Lenders will be required to ensure loans are affordable for consumers, while advertisements must be fair, clear and not misleading.
Following the announcement, the economic secretary to the Treasury John Glen said: ‘Buy now, pay later can be a helpful way to manage your finances but we need to ensure that people can embrace new products and services with the appropriate protections in place.’
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