From 15 July 2026, Buy Now Pay Later (BNPL) services, like Klarna, Clearpay, Zilch and others, will be brought under formal financial regulation by the Financial Conduct Authority (FCA). Until now BNPL has sat in a sort of regulatory limbo, being convenient and easy to use, but with very few legal protections for its users.
What are the changes
Previously, BNPL often didn’t count as regulated credit. That meant that standard credit safeguards didn’t apply, so no FCA oversight, limited dispute rights, and no guarantee of fairness if something was to go wrong with your purchase.
From July 2026:
- BNPL agreements will fall under FCA rules, meaning that companies must treat you fairly and give clear information about costs and risks.
- You’ll be able to complain to the Financial Ombudsman Service if a provider doesn’t resolve a dispute.
- BNPL providers must tell you exactly what you owe, when payments are due and what happens if you miss a payment before you confirm your purchase.
Affordability checks on all purchases
One of the most important changes is that BNPL companies will need to carry out affordability checks every time you use BNPL, not just when you first sign up.
That means:
- Before you can split the cost of something the lender will assess whether you can realistically afford the repayments.
- This isn’t necessarily a hard credit score check every time, but expect providers to take your finances into account more seriously than before.
That should help prevent the build up of unmanageable debts, especially if you’re using multiple BNPL plans across different retailers.
Stronger legal rights
Under the new rules BNPL purchases will qualify for Section 75 protection on purchases between £100 and £30,000, as with credit cards. Currently, if something goes wrong with a BNPL purchase, like a faulty item, or a retailer disappearing, you usually can’t hold the lender jointly responsible. But after July 2026 you can, meaning you have a better chance of securing a refund or compensation. Similarly, unfair treatment by a BNPL provider can be taken to the Financial Ombudsman Service once your agreement is regulated.
Better support if you’re struggling with payments
The FCA has said BNPL lenders must offer support if you fall into financial difficulty, including signposting you to free debt advice services if needed. That doesn’t mean lenders will cancel payments for you, but they’ll need policies to deal fairly with people who are struggling and you’ll get better clarity on what options are available, such as payment plans or extensions, before fees and penalties kick in.
What are the exceptions
The changes only apply to third-party BNPL lenders. That is where a separate company provides your credit rather than the retailer itself. So, if a store offers its own in-house payment plan that might not be covered under the FCA regulation.
BNPL is becoming safer, but it is still borrowing
The regulation is good news for consumers. The new rules mean clearer information about what you’re signing up to. It brings tighter affordability checks to help prevent over borrowing, legal protection like Section 75, support if payments become difficult and access to the Financial Ombudsman if needed.
But BNPL is still borrowing. You’ll still need to make payments on time, and missing them can affect your financial health. The new rules mean you’ll be better informed and protected than before, but you still need to be mindful with your spending.
What you should do before using BNPL
The new rules mean you’ll be better informed and protected than before, but you still need to be mindful with your spending.
Before clicking “Pay in 3”, ask yourself:
- Could you afford this purchase without credit?
- What other BNPL payments do you already have?
- What happens if your income changes next month?
- Would a credit card (with stronger protections) be more appropriate?
Keep track of installment dates. Avoid stacking multiple plans across different retailers and check your credit report regularly to see how BNPL is being recorded and impacting your score.
The changes should mean fewer surprises, more transparency, stronger rights and a fairer complaints process should things go wrong. But it also signals that the regulators now view BNPL as serious credit not just a payment tool and you should too.
If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk