Search News

Results: 41-50 of 2742


Start again

3 Mar 2021

The key message to everyone is if you live a short distance from your school, college or university, consider walking or cycling.

3 Mar 2021

Maybe* has made a collection of recent social headlines to help you stay up-to-date.

23 Feb 2021

The report provides key insights into the social and economic contributions of the rural shop sector, including profiles of the entrepreneurs that run rural shops, the investments they make and...

22 Feb 2021

The recycling scheme aims to reduce the tens of thousands of tonnes of scrap bike tyres and inner tubes that endup in landfill every year in the UK alone

18 Feb 2021

Leading industry bodies, including IRC members, have warned the Secretary of State that this notion puts the future of our town centres at serious risk

18 Feb 2021

Due to a stock clearance all Take it outdoors POS is now reduced to £0! All you need to pay for is postage

18 Feb 2021

From 1 June 2021 any UK businesses accepting online card payments must be ready to support SCA

17 Feb 2021

The Scottish Government Finance Secretary plans to extend 100% business rates relief for all retailers to cover all of 2021/22

17 Feb 2021

Sharpen up your employees' knowledge and skills in preparation for the peak cycling season.

16 Feb 2021

All ACT members are invited to join the webinars, please contact us if you'd like to attend

Back to news menu

BNPL firms to be regulated by the Financial Conduct Authority after warnings of "unseen debt"

Posted on in Business News ,Brands & Products News , Cycles News , Political News

BOnline shoppinguy now pay later (BNPL) firms such as Klarna and Clearpay are to be regulated by the Financial Conduct Authority (FCA) after a report warned of the risk of people running into "unseen debt".

BNPL services allow people to defer payment for goods or pay in instalments. A Recent report for the financial regulator, The Woodlard Review, found use of BNPL services had quadrupled in 2020 and that one in 10 customers had existing debt arrears. The report calls for BNPL firms to perform affordability checks on shoppers and ensure customers are treated fairly, particularly those struggling with repayments.

Chris Woolard, who led the FCA review recommending regulation, said that although BNPL was convenient for some people, for others it was "a really easy way to fall into problem debt". 

The report shows that BNPL services were used by five million people in the UK for total sales of £2.7bn in the last year.  Following the report, the FCA said it would be easy to build-up unseen debts of £1,000 and will now begin to regulate the sector.

Economic Secretary to the Treasury John Glen said: "By stepping in and regulating, we're making sure people are treated fairly and only offered agreements they can afford - the same protections you'd expect with other loans."

 

Regulation comes after much campaigning

Amongst those campaigning for the regulation of BNPL firms was Alice Tapper, financial campaigner, who said that she had received hundreds of messages from distressed young people, particularly throughout the first lockdown, with one in six 18 to 24-year-olds having turned to buy-now-pay-later services. Tapper was delighted with the recent announcement that these firms are to be regulated and said the following on LinkedIn:

"8 months of campaigning, 250 case studies and 1 threat of legal action later (thanks Klarna!) and the FCA has concluded that buy now pay later needs to be regulated urgently.

As it stands, victims of fraud via BNPL products have been unable to seek the support of the Financial Ombudsman and shoppers as young as 18 are being advertised these products by influencers, with no risk wording. Today, BNPL is often a teenager's first encounter with credit.

It is reassuring that the FCA has identified the need for action and I'm delighted by Mr Woolard's recommendations. Regulation means consumers will receive the information and protection they deserve.

The FCA & Government now need to act fast to bring these recommendations into fruition. As Mr Woolard highlights, this is an urgent issue and there is no time for delay."

Labour MP Stella Creasy, also campaigned heavily for the regulation of these services, and wrote to both the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) to raise the issue. 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. 

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." 

To add to the list, English journalist and television presenter, Martin Lewis OBE, most well-known for founding MoneySavingExpert.com, put forward his concerns about the growing popularity of BNPL providers. Speaking on BBC Radio 5 Live Lewis described the popular BNPL payment methods as "an explosive form of credit that's becoming quickly dominant".

The government has said that it would legislate as soon as possible, following consultation.

Back to news menu

Useful links

If you have any other queries please contact us.