UK’s FCA Proposes New Protections for BNPL Borrowers

The United Kingdom’s Financial Conduct Authority proposed new protections for buy now, pay later borrowers that would take effect when BNPL comes under the regulator’s remit on July 15, 2026.

The proposals would require lenders to check that people can afford to repay BNPL loans, require them to offer the borrowers support if they get into financial difficulties, and allow BNPL borrowers to take any complaints to the Financial Ombudsman Service, the FCA said in a Friday (July 18) press release.

The proposals will extend to BNPL the same protections that are available for other types of lending, the release said.

“We have long called for BNPL products to be brought into our remit, so people can benefit from BNPL while being protected,” Sarah Pritchard, deputy chief executive at the FCA, said in the release. “Our regulation will help consumers navigate their financial lives, with checks on whether they can afford to repay, support when things go wrong and access to the right information to make informed decisions.”

BNPL lenders, consumer groups and others can provide feedback on the FCA’s proposals by Sept. 26, according to the release.

Following the close of that consultation, the regulator will consider the feedback in late 2025, issue a policy statement and final rules in early 2026, and implement the regulation on July 15, 2026, according to supplemental information for firms that was posted Friday.

In a Thursday post on social platform X, Fair By Design, a U.K. group working to eliminate the “poverty premium,” welcomed the FCA’s proposals.

“Great to see [the FCA’s] consultation on BNPL out today,” the post said. “We welcome the intention to ensure that consumers are given information that equips them to understand their rights and protections.”

Great to see @TheFCA‘s consultation on BNPL out today.

We welcome the intention to ensure that consumers are given information that equips them to understand their rights and protections.#FinancialInclusion https://t.co/wJuRyFuiYh

— Fair By Design (@FairByDesign) July 18, 2025

The FCA said in an occasional paper released Friday that unregulated BNPL, or “deferred payment credit (DPC),” is generally used by consumers who are young, less creditworthy and burdened with higher levels of unsecured debt.

“These findings show DPC users are more vulnerable than the wider U.K. population,” the FCA said in its summary of the paper. “As DPC is currently unregulated, they may need additional protections and support.”