Budget 2024: Martin Lewis sends warning over Buy Now Pay Later crackdown
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Martin Lewis has issued a warning over a new crackdown on buy now, pay later products.
The money expert has cautioned consumers it is a case of buy now, get protected later.
Ministers have announced that millions of shoppers are to be protected by new rules for BNPL, as they are known.
Mr Lewis welcomed the change saying: “Buy Now, Pay Later is now ubiquitous at online checkouts, so the fact it’s never been regulated is a travesty I and others have long campaigned on.
“The last chancellor promised to regulate, then the tumbleweed rolled as he went silent, so I am delighted the new government has quickly restarted the process.”
Martin Lewis sent a warning over the new crackdown on buy now, pay later products (PA)
Mr Lewis, who said the chancellor Rachel Reeves rang him personally to tell him about the change, said that BNPL could useful, allowing those who need to spread payments to do so interest-free.
But he criticised that it had been “sold as a lifestyle choice, not a debt, and pushed for instinct buys or even takeaways… Regulation will mean firms must be overt that it’s a debt, have proper affordability rules, and will crucially let people go to the ombudsman if things go wrong.”
And he warned: “It’s not coming in until 2026, so people should still be very wary until then.”
The market for BNPL has exploded in recent years, in part because of the cost of living crisis, as consumers are lured by the promise of interest-free future payments for items they could not otherwise afford.
Under the plans Buy Now, Pay Later companies would be under the supervision of the Financial Conduct Authority (FCA) and under the Consumer Credit Act, ensuring users receive clear information, avoid unaffordable borrowing, and have strong rights when issues arise.
Treasury minister Tulip Siddiq said: “Millions of people use Buy Now, Pay Later to manage their finances, but the previous government’s dither and delay left them unprotected.
“We promised to take action before the election and now we are delivering. Our approach will give shoppers access to the key protections provided by other forms of credit while providing the sector with the certainty it needs to innovate and grow.”
https://www.independent.co.uk/news/uk/politics/martin-lewis-buy-now-pay-later-warning-budget-reeves-b2631375.html