Following news this weekend that there could be delays to regulation of the Buy Now, Pay Later sector, Richard Lane, Director of External Affairs at StepChange Debt Charity, said:
“We’re alarmed to read reports this weekend that the Government could be set to shelve much needed plans to regulate the Buy Now, Pay Later sector. This seems particularly counter intuitive during a cost-of-living crisis, where protecting financially vulnerable customers is more important than ever.
“We’ve long called for proportionate and effective regulation and warmly welcomed the Government announcement last year that they had heard the cross-party calls for regulation and would put in place new rules to protect customers. It makes it even more surprising now that the Government is considering back tracking on previous promises.
“At StepChange, we know that there has been a huge growth in the use of Buy Now, Pay Later products over the last few years, with services now available at a wide range of retailers offering anything from clothing to groceries.
“We know that these products work well for millions of consumers, but we’re also concerned that current policies around late fees and affordability assessments vary significantly between providers. At present some consumers may hold multiple BNPL agreements that are unaffordable to them, which puts them at risk of escalating fees if they miss repayments. This is especially concerning as our research suggests a significant crossover between use of BNPL and financial difficulty, with many people borrowing to pay bills or make credit repayments.
“Proportionate regulation will improve these products for millions of customers and we urge the Government to stick to its guns and put customers who might be struggling during a cost of living crisis first.”