Connect with us

Hi, what are you looking for?

Editor’s Pick

Treasury set to tighten up pay later schemes

<?xml encoding=”utf-8″ ??>

The government has set out plans to clamp down on buy now, pay later schemes, after concerns that some people are borrowing more than they can afford to repay.

Lenders will need to be approved by the Financial Conduct Authority and required to carry out affordability checks on customers, who will be able to take complaints to the Financial Ombudsman Service.

Penalties for failing to comply include a ban from offering regulated services and products or fines against companies and individuals.

People using buy now, pay later schemes will also be covered by Section 75 of the Consumer Credit Act, which gives customers the right to compensation when they spend between £100 and £30,000 on goods or services.

Under the Treasury’s eight-week consultation, lenders will have to give customers key information about their loans and issue credit that is genuinely affordable. The government estimates that the rules will help protect about 10 million people using the loans.

Lenders make their money from retailers by taking a cut of each transaction. The payment model, which was largely used at first for low-cost fashion, is now used for items including holidays, furniture and paying rent.

Many agreements are not regulated and rely on minimal checks, and lenders are not required to give key information to borrowers, the Treasury said, which means some people may borrow more than they can afford to repay.

The government has previously outlined plans to strengthen rules around such firms. In June it said lenders would be required to carry out checks to make sure loans were affordable for consumers, and financial promotion rules would be amended to ensure advertisements are fair, clear and not misleading. The next stage after the new consultation will be legislation.

More than two out of five customers of the schemes borrowed money elsewhere to keep up with their buy now, pay later commitments, according to Citizens Advice. The most popular type of borrowing was on credit cards.

A meeting of banks and debt charities will be convened today by the City minister, who will urge the group to work together to improve financial education. Andrew Griffith, economic secretary to the Treasury, said: “People should be able to access affordable credit, but with clear protections in place. Today’s summit will also help regulators and banks better understand the best ways to support people who feel boxed in by debt and open up the financial system to people who find it more difficult to access.”

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



Notice of Annual Stockholders’ Meeting Please be notified that the Annual Meeting of Stockholders of Semirara Mining and Power Corporation (the “Corporation”) will be...


San Buena Farm is now able to communicate with its key accounts because of satellite broadband. In the Philippines, agricultural sector contributes 9.4% to...

Editor’s Pick

<?xml encoding=”utf-8″ ??> 2023 has been challenging for business so far, but a new poll of SMEs in England from the Join the Skills...


GENERAL view of a public market in Quezon City, Metro Manila, Philippines, Feb. 9, 2023. REUTERS/Eloisa Lopez THE WORLD BANK downgraded its growth forecast...


Sheets five-dollar bills are seen through a magnifying glass at the Bureau of Engraving and Printing in Washington March 26, 2015. —REUTERS/Gary Cameron/File Photo...


REUTERS HOUSING prices across the Philippines grew at a faster annual pace in the fourth quarter, driven by strong demand for duplex housing units and...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.