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The Financial Conduct Authority (FCA) today confirmed it will introduce new rules in the Buy Now Pay Later (BNPL) market, saving consumers around £40-60 million a year.*The changes, which include banning firms from charging backdated interest on money that has been repaid by the consumer during the BNPL offer period, will be in force by 12 November 2019.
https://www.fca.org.uk/news/press-re...later-products
What we are changing …
1.11 BNPL offers are credit offers with a product feature that gives the consumer a promotional period, typically up to 12 months, during which they are not generally required to make repayments. It is usually the case that if the consumer repays the entire amount within this period, no interest is charged. However, if the consumer does not repay the entire amount within this period, then interest will usually be charged on the original credit amount or the unpaid part of that amount from the date of purchase.
1.12 Different types of firms offer a BNPL product feature as part of their credit offers. These include catalogue credit, store cards, and retailers that offer finance at the point of sale (which can be in store or online).
1.13 Our changes are designed to reduce the harm experienced by consumers that buy products using BNPL credit offers, caused by unclear information and the practice of backdating interest on amounts that have been repaid during the BNPL offer period.
1.14 Our changes should improve the information consumers receive about BNPL offers, at the point of sale and during the life of the contract. They will also stop firms from charging backdated interest on partial repayments consumers have made during the BNPL offer period.
https://www.fca.org.uk/news/press-re...later-products
What we are changing …
1.11 BNPL offers are credit offers with a product feature that gives the consumer a promotional period, typically up to 12 months, during which they are not generally required to make repayments. It is usually the case that if the consumer repays the entire amount within this period, no interest is charged. However, if the consumer does not repay the entire amount within this period, then interest will usually be charged on the original credit amount or the unpaid part of that amount from the date of purchase.
1.12 Different types of firms offer a BNPL product feature as part of their credit offers. These include catalogue credit, store cards, and retailers that offer finance at the point of sale (which can be in store or online).
1.13 Our changes are designed to reduce the harm experienced by consumers that buy products using BNPL credit offers, caused by unclear information and the practice of backdating interest on amounts that have been repaid during the BNPL offer period.
1.14 Our changes should improve the information consumers receive about BNPL offers, at the point of sale and during the life of the contract. They will also stop firms from charging backdated interest on partial repayments consumers have made during the BNPL offer period.
