Credit: Regulation

Treasury written question – answered on 16th December 2020.

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Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

To ask the Chancellor of the Exchequer, if he will take steps to authorise the Financial Conduct Authority to regulate businesses in the buy now, pay later sector.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Buy-now-pay-later products that apply interest are regulated credit agreements, and therefore firms offering them must be authorised and regulated by the Financial Conduct Authority (FCA) and must comply with the relevant sections of the FCA’s Consumer Credit sourcebook and provisions contained within the Consumer Credit Act 1974. However, buy-now-pay-later products that are interest-free, repayable by no more than 12 instalments within no more than 12 months, and are used to finance specific goods or services, are unregulated.

Former interim CEO of the FCA, Chris Woolard, is currently undertaking a review into change and innovation in the unsecured credit market, which includes unregulated buy-now-pay-later products.

When the review reports in early 2021, the Government will assess the findings and will take quick, proportionate action if substantive evidence of consumer harm is found to be occurring.

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