New shopping rules for the UK – what you should know

The Treasury has announced the introduction of new shopping rules aimed at clamping down on unregulated borrowing.

From next year, Buy-Now, Pay-Later (BNPL firms) will need to follow consistent standards so shoppers will know exactly what they’re signing up for when they opt to break up payments, whether they can afford it, and how to get help when things go wrong.

This will include upfront checks to make sure people can repay what they borrow, fairer and faster access to refunds, and the right to complain to the Financial Ombudsman – bringing BNPL in line with other credit products, the Treasury said.

It added that BNPL can be a useful tool when used responsibly to help people manage their finances and has grown rapidly, with an extra two million people using the product since 2022.

Other changes planned

The announcement is backed by brand new reforms to the Consumer Credit Act, which will replace a 50-year-old regime with a modern, pro-growth framework that reflects how people borrow today. 

Outdated and confusing rules will be removed, with oversight shifting to the FCA’s more flexible system, cutting unnecessary burdens on business while strengthening protections for consumers, Treasury said.

“Buy-Now, Pay-Later has transformed shopping for millions, but for too long has operated as a wild west – leaving consumers exposed,” said Emma Reynolds (Economic Secretary to the Treasury)

“These new rules will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs through our Plan for Change,” she said.