Buy now, pay later protections finally set to take force next July – but Martin Lewis warns shoppers to be careful in the meantime

One in five people used unregulated BNPL firms either in-store or online last year, according to research from financial regulator the Financial Conduct Authority (FCA). It can be a useful tool, as it allows you to spread the cost of an item over several months interest-free.

But compared to other forms of debt, there are few affordability checks, meaning that too many people end up with multiple BNPL repayments and damaged credit files. Research by debt help charity StepChange found that BNPL users are also twice as likely as other credit users to borrow to cover essential bills, and it's now as common as using an overdraft amongst UK adults.

This is why we've long been calling for urgent regulation, which the FCA has now confirmed will come into effect on 15 July 2026.

Martin Lewis: 'Protections are not fully in place – you should still be careful'

BNPL to be regulated – here's what it means for shoppers

Key changes put forward in the consultation, which will run until 26 September 2025, include BNPL providers needing to:

• Give clear and accessible information about the risks involved. This should enable you to make fully informed decisions before using BNPL services.

• Run affordability checks on shoppers. Firms will have to check that you can afford to make repayments. Citing research from Martin's charity the Money and Mental Health Policy Institute, the FCA said that BNPL's "seamless customer journey and lack of friction" can lead to impulse buying and debt for some people.
  
  As a result, the regulator has confirmed that firms will have to run checks for every purchase, not just when you first open an account – though the checks won't have to be as strict if you're repeatedly borrowing small amounts.

• Give powerful Section 75 protection on purchases made using BNPL. This would apply to items costing over £100 but not more than £30,000, as it does for credit cards currently. It means the BNPL provider will be jointly liable with the retailer if anything goes wrong.

• Allow users to take complaints to the Financial Ombudsman Service. If you complain to a BNPL firm and don't get anywhere, you'll be able to escalate your complaint to the independent arbitrator, which can officially determine whether you've been treated fairly. This should make it easier to get a refund if you're entitled to one.

• Contact you straight away if you miss a repayment. Firms will need to explain what you owe, the consequence of missing repayments, and how you can remedy the situation. If you're struggling or in financial difficulty, they'll also need to signpost you to free debt help services and consider offering forbearance (for example, giving you longer to pay or waiving fees).

Martin and MSE have long called for urgent regulation

Martin and MSE, alongside other campaigners, have long called for the "explosive" BNPL market to be regulated. In February 2021, the previous Government announced that regulation would be implemented. However, despite renewed calls for action from Martin and MSE, alongside others, the last Government never put the regulation in place.

To read more about our calls for regulation, see our BNPL Campaigns blog. For more on using BNPL schemes responsibly, see our Buy now, pay later guide.