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26 May 2022

Cyber risk is now present in most business operations and business owners are beginning to understand that you do not need to be a digital business to be exposed to cyber risks, only digitally...

19 May 2022

Our research found agreement that a minimum OST threshold could help to rebalance the burden of tax across the industry, generate revenue to reduce business rates for smaller businesses,...

19 May 2022

As part of their support for Local Bike Shop Day, Cyclescheme ran a competition for the local bike shop with the most social media noise, with the chance to win a £150 Restaurant Choice...

19 May 2022

In a ceremony held in Leipzig, Germany, the largest gathering of transport ministers in the world will see current president, Morocco, hand over the reins to UK Transport Secretary Grant...

16 May 2022

Millions of people across the country will benefit from cleaner air and cheaper ways to travel and keep active, thanks to £200 million of government funding for new walking and cycling...

12 May 2022

Local Bike Shop Day 2022 was a great success across the UK, with online platforms thriving as well as a surge in the physical footfall seen in-stores!

12 May 2022

We Can, You Can is a celebration of the many faces of cycling. The way we move is changing. And the people leading the change are like me and you. We can, you can.

10 May 2022

The speech sets out the government’s agenda for the upcoming Parliament, outlining proposed policies and legislation. An overview of the main announcements relevant to independent shops is...

28 Apr 2022

To celebrate Local Bike Shop Day on Saturday 30 April, BetterPoints are offering QUINTUPLE points and the chance to win a £55 bike service by choosing to travel on two...

26 Apr 2022

Wheels for Wellbeing is a Disabled people’s cycling organisation who campaign for equal access to cycling...

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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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