Citizens Advice Scotland has welcomed the news that the Financial Conduct Authority is to regulate Buy Now Pay Later (BNPL) deals.
Responding to the news, CAS spokesperson Myles Fitt said,
“We all understand the temptations of BNPL deals, but if people access them but then don’t have the money ‘later’ to repay the debt, they can have devasting impacts. The problem is that such deals allow people to have quick access to credit without the rigorous processes other credit firms are bounded by, such as affordability checks and credit assessments.
“Over the Christmas period, UK shoppers spent £2.3bn using BNPL and recent research has shown that 20% of these shoppers will now struggle to repay this borrowing, which could lead them into problem debt. This indicates that people have resorted to using this product as they couldn’t access other means of credit, or have other debts already.
“So we welcome the FCA’s announcement into its intention to bring unregulated BNPL products under their regulation as a matter of urgency. And we would urge anyone who is struggling to repay any kind of debt to get advice from their local CAB as soon as possible.”