Buy now pay later is now regulated: what the FCA rules mean when you shop

What's changed

Since 15 July 2026, most buy now pay later (BNPL) plans in the UK have been regulated by the Financial Conduct Authority (FCA). Before that date, the interest-free "pay in three" or "pay in four" plans offered at checkout weren't regulated at all. With Black Friday on 27 November and Christmas shopping under way, it's worth knowing what protection you now have, and where the gaps are.

The FCA calls these plans Deferred Payment Credit. It says about 11 million people use BNPL, and that the market grew from £0.06 billion in 2017 to more than £13 billion in 2024.

At a glance

• Lenders must check you can afford to repay before you take out a plan.
• You must be told the key terms first, including repayment dates and amounts and any late fees.
• Section 75 of the Consumer Credit Act is available, the same protection as paying by credit card.
• You can complain to the Financial Ombudsman Service if the lender doesn't put things right.
• Plans taken out before 15 July 2026 stay unregulated, and so does credit offered directly by the shop itself.

What's covered

The rules cover interest-free plans repaid in 12 or fewer instalments within 12 months, where the lender is a different business from the shop. That's how most well-known checkout BNPL works. The FCA's final rules were published in February 2026 in policy statement PS26/1.

Lenders now have to carry out "proportionate" affordability checks. The FCA's deputy chief executive, Sarah Pritchard, said "no one should be lent to if they're unable to repay." If you miss a payment, the lender has to contact you to explain what that means. If you're in financial difficulty, it must offer support and, where appropriate, point you to free debt advice. The FCA's Consumer Duty also applies, so firms must aim for good outcomes for customers.

What isn't covered

Any BNPL agreement taken out before 15 July 2026 stays unregulated, even if you're still paying it off. And if the shop lends you the money itself, rather than using a separate lender, the plan isn't regulated either. The FCA also notes that some products sold as BNPL charge interest, so check whether yours does before you sign up.

A worked example

This is an illustration. On 27 November, Amy buys a £240 coat online and splits the cost into four payments of £60 through a third-party BNPL lender. The coat arrives with a broken zip, and the shop stops replying to her emails.

Because the agreement started after 15 July 2026 and the lender is separate from the shop, it's regulated. The coat costs more than £100, so Amy can make a Section 75 claim against the BNPL lender for a refund. If the lender rejects her claim or doesn't respond within eight weeks, she can take it to the Financial Ombudsman Service. If she'd bought the same coat on the same plan in June, she'd have had none of these protections.

What to do now

1. Check the lender is authorised. Search the FCA's Firm Checker, or its list of firms with temporary permission.
2. Read the key information before you agree, especially the repayment dates and late fees.
3. Add up all your plans before Black Friday, so you know what's due each month.
4. If something goes wrong with a purchase, ask the shop first, then the lender, quoting Section 75 if the item cost over £100.
5. Complain to the lender in writing, then go to the Financial Ombudsman Service if you're not happy after eight weeks.
6. If you're struggling, contact the lender early and get free help from MoneyHelper.

Questions

How do I know if my plan is regulated?

Check the date you took it out and who the lender is. If it started on or after 15 July 2026 and the lender is a different company from the shop, it's likely to be regulated. The lender's key information should also tell you about your rights.

How long do I have to go to the ombudsman?

Usually six months from the lender's final response. You can go sooner if eight weeks pass without one.

Can the lender refuse me?

Yes. Affordability checks are designed to stop people borrowing what they can't repay, so you may be turned down or offered a lower limit.

Ways to save

Spreading payments doesn't make anything cheaper. Before you split a Black Friday purchase, check for a code on our Currys, Argos and Very pages, and compare the price elsewhere.

Sources: FCA: Buy Now Pay Later, FCA: New protections confirmed for BNPL borrowers, FCA: PS26/1, Consumer Credit Act 1974, section 75, Financial Ombudsman Service: How to complain, MoneyHelper: Dealing with debt