FCA announces BNPL rules

FCA has announced new rules for the Buy Now Pay Later market, taking effect later this year  The rules will protect consumers by:

  • banning firms from charging backdated interest on amounts of money that have been repaid by customers during any BNPL offer period;
  • requiring firms to give better, clearer, more balanced information on BNPM offers, that properly reflect both risks and benefits; and
  • requiring firms to prompt customers reminding them when the offer period is about to end – in the hope that they will then repay the credit before incurring interest.

The disclosure rules take effect from 12 September, and the partial repayment rule from 12 November.

Despite some significant objections from the market to certain of the proposals, the rules are fairly much as FCA consulted on them in December 2018, with a small adjustment to the definition of BNPL credit. The changes are to CONC chapters 3, 4 and 6, and also include transitional provisions in respect of drawdowns of credit made on or before 12 June.


Caroline Stevenson