Consumers who have attempted to use Buy Now Pay Later (BNPL) services since the summer have been subjected to new tests designed to verify their ability to afford purchases. While BNPL has historically functioned as a loan repaid in installments, it only became officially regulated in July. This regulatory shift mandates stricter background checks on repayment capacity, meaning that failing these assessments will result in blocked transactions.
Under the new framework, BNPL lenders such as Klarna and Clearpay must now obtain regulator approval to operate. This change aims to provide shoppers with greater access to refunds and independent rulings on complaints should issues arise. However, the introduction of mandatory affordability checks for each transaction means some users may find themselves blocked from services for the first time. These checks vary depending on the purchase amount, a factor that becomes particularly relevant as the expensive festive season approaches.
Sara Williams, a former volunteer debt adviser at Citizens Advice who shares tips under the name Debt Camel, suggests four strategies for those whose accounts are closed or borrowing limits reduced. First, consumers should slow down their purchasing habits by questioning if an item is essential or can be postponed. Second, buyers should be more selective to avoid requiring high credit limits, such as when purchasing multiple clothing sizes. Third, canceling subscriptions can help escape the cycle of using BNPL to cover previous payment costs. Finally, individuals using BNPL for essentials are encouraged to contact debt charities for assistance and access to food bank vouchers.
For those struggling with repayments on any type of loan, seeking help before the situation worsens is crucial. The government-backed MoneyHelper website offers a guide to finding free local debt advice. It also recommends writing down all debts to create a repayment plan and provides tools to determine eligibility for benefits and grants. Additionally, the site features a bill prioritizer to indicate which payments should be made first and outlines steps to take if a payment is missed. Consumers are also advised to remain skeptical of debt solutions promoted on social media feeds.
Sources: BBC News UK.