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21 Jan 2021

The call to regulate BNPL firms like Klarna, Laybuy and Clearpay is now supported by 70 MPs, with many arguing that the FCA review is too lengthy and could leave consumers drowning in debt

18 Jan 2021

The Welsh Government has published a white paper setting out its plans for a Clean Air (Wales) Bill, to protect the health of the nation and ecosystems from pollutants in the atmosphere. ...

13 Jan 2021

The increase in the SUCB charge will not result in a cost increase for retailers.

29 Dec 2020

Welsh Government Finance Minister Rebecca Evans MS has unveiled its ‘Protect, Build, Change' draft Budget for 2021/22

21 Dec 2020

All retailers, who have a taxable turnover of £10,000 or more per year from their business or income from property will now be required to submit their tax returns digitally.

17 Dec 2020

Butterworth Spengler have provided an update on the situation regarding the implications of driving outside the UK if a ‘Brexit' deal is not struck, and how this will affect motor...

9 Dec 2020

Communities Secretary Robert Jenrick announced today (9 December 2020) that business owners affected by the pandemic will be protected from eviction until the end of March 2021.

7 Dec 2020

The meeting topics evaluated any lessons that we have so far learned from national lockdowns and ways in which we can move forward from this using government support.

25 Nov 2020

The Chancellor presented his Spending Review to Parliament today settingout the Government's departmental spending plans for the year ahead andresponse to Coronavirus (Covid-19).

16 Nov 2020

£175 million more for cycling and walking as research shows public support

Urgent demand from MPs to regulate Buy Now Pay Later firms

Posted on in Business News , Cycles News , Political News

TOnline shoppinghe call to regulate BNPL firms like Klarna, Laybuy and Clearpay is now supported by 70 MPs, with many arguing that the FCA review is too lengthy and could leave consumers drowning in debt.

The growing distrust for popular Buy Now Pay Later (BNPL) providers has frequently been making the headlines for well over a year now. The issues that these popular provides cause has been bought to attention of debt charities, financial campaigners and even MPs.

The BNPL industry has seen huge growth in recent years, with the likes of Klarna and Affirm becoming multi-billion dollar giants. However, multiple investigations have revealed a developing pattern reflecting that as these trendy lenders continue to grow in popularity, as does the amount of debt racked up by poorly informed consumers.

According to research by Credit Karma, a quarter of Brits used BNPL services to fund Christmas shopping, setting up a £2.3 billion bill. A recent study by Capco reveals that more than half of 18-34 year olds using it have missed a payment and nearly two thirds say it is making them spend more, potentially increasing their chances of getting into debt.

This mounting problem was bought to the attention of Labour MP Stella Creasy, who wrote to both the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) to raise the issue of BNPL. Stella Creasy previously campaigned against pay day loaners Wonga in 2014, which led to the FCA, the financial services industry watchdog, investigating Wonga and forcing it to write off 330,000 loans worth £220m and compensate 45,000 other customers.

 

"next Wonga waiting to happen"

Creasy is not alone in her concerns, the issue was discussed in the House of Commons last week, where a bill to regulate BNPL firms like Klarna, Laybuy and Clearpay was supported by 70 MPs. During the discussion Creasy referred to the entry of a host of BNPL firms as the "next Wonga waiting to happen".

The FCA is conducting a review into BNPL firms, but some MPs worry that the lengthy process could push regulation out by another 18 months, leaving consumers drowning in debt during an economic downturn.

 

"1 in 10 are left struggling to pay rent"

Creasy recently posted on twitter headlined "Why we need to stop the Klarnage", which went on to encourage people to discuss the growing issue with their MP, "A quarter of their customers have had to ask family or friends to pay back money, 1 in 10 are left struggling to pay rent. Ask your MP if they missed this chance to stop the next wonga and voted yes or no to NC7."

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