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2 Mar 2022

The FCA was concerned there was a potential risk of harm to consumers as a result of the way Clearpay, Klarna, Laybuy and Openpay's T&Css were drafted.

17 Feb 2022

Buy Now, Pay Later purchases are set to appear on credit reports for the first time, meaning lenders will be able to see the borrowing

23 Nov 2021

Improperly regulatedBuy Now Pay Later services aren't just growing in popularity among consumers, they're also proving to be a hit with criminals.

8 Nov 2021

As trendy Buy Now Pay Later (BNPL) services continue to grow in popularity across the UK, a charity has warned that using these non-regulated services can be like "slipping into quicksand"....

20 Sep 2020

The ACT's new infographic that helps you to know what to look out for when choosing the right finance provider

12 Nov 2019

A recent story published on BBC news shows how a popular finance provider misled a 21-year-old student which ended in...

24 Oct 2019

Halfords have recently changed finance provider resulting in, what many might consider, undesirable implications for UK consumers

3 Apr 2019

Following an increase of incoming calls querying finance providers in the cycles market, the ACT are publishing a mini-series to answer the trade's questions.

26 Mar 2019

Following an increase of incoming calls querying finance providers in the cycles market, the ACT are publishing a mini-series to answer the trade's questions.

20 Mar 2019

Following an increase of incoming calls querying finance providers in the cycles market, the ACT are publishing a mini-series to answer the trade's questions

FCA secures changes to potentially unfair and unclear T&Cs of BNPL providers

Posted on in Business News , Cycles News , Political News

Theterms Financial Conduct Authority (FCA) secures changes to potentially unfair and unclear terms in the contracts of Clearpay, Klarna, Laybuy and Openpay. The FCA was concerned there was a potential risk of harm to consumers as a result of the way some of the firm's terms were drafted.

 

The Woolard Review into change and innovation in the unsecured credit market found the use of Buy-Now Pay-Later (BNPL) products nearly quadrupled in 2020 to £2.7 billion. The Government plans to change the law to bring some of the current forms of unregulated buy-now-pay-later products into FCA regulation.

Even though the type of buy-now-pay-later agreements offered by these firms are not yet regulated, the FCA was able to use the Consumer Rights Act to assess the fairness and transparency of the terms.

As a result of the FCA's work, the firms are making terms on issues like contract cancellations and continuous payment authorities fairer and easier to understand. In addition, one of the terms that involved late payment fees has resulted in Clearpay Laybuy, and Openpay agreeing to voluntarily refund customers who have been charged late payment fees in specific circumstances.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:

'Buy-Now Pay-Later has grown exponentially. We do not yet have powers to regulate these firms, but we do have powers to review the terms and conditions of consumer contracts for fairness, and have acted proactively to ensure that the BNPL industry adopts high standards in their terms and conditions.

'The four BNPL firms we have worked with have all voluntarily agreed to change their approach. We welcome this and hope that the rest of the industry will now follow.'

Find out more

The ACT has previously raised concerns about the improper regulation of BNPL providers and the risks that this brings to potential customers. 

It may be worth having a recap of the ‘Avoid the pitfalls' mini-series that the ACT published to answer the trade's questions about selecting the most suitable retail finance provider.

Key topics examined are why low rates can equal lost sales, the importance of checking the finer details of your agreement and why you should identify who actually lends the money when selecting your provider.

Choosing a finance provider, avoid the pitfalls #1
Choosing a finance provider, avoid the pitfalls #2
Choosing a finance provider, avoid the pitfalls #3

 

If you would like to talk to someone from the ACT or ActSmart about how we can help find the right finance provider for you please get in touch.

C 2 Zero Limited t/a ActSmart & Ride it away is authorised and regulated by the Financial Conduct Authority 657829.

 

 

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