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London — People UK of financial watchdogs Friday told companies that offer loans to stop encouraging “impulse buying”, make late payment fees explicit, and “buy now, pay later.” It warned that the person responsible for the misleading advertisement could be sentenced to two years in prison.
As the UK's cost of living crisis worsens, the Financial Conduct Authority has advised so-called BNPL companies and the UK retail consortium that on-the-spot, interest-free, short-term loans will reduce the associated risks to fair and It was highlighted in advertisements without showing it prominently.
BNPL loans, which spread the repayment of goods such as clothing over several weeks, are not regulated in the UK, but the FCA has the power to intervene in how it is advertised, with 4,226 I am forcing the publicity of the matter. It will be withdrawn or changed later this year.
With many Britons facing rising energy costs and rising food prices from four decades of high inflation, funds are becoming increasingly tight and BNPL products are a financially strained option. It has become.
"We are facing a cost of living crisis that is forcing consumers to make difficult decisions about their finances and how they will pay for goods and services," said FCA's Consumer and said Sheldon Mills, Executive Director of Competition.
BNPL lenders make a profit by helping retailers sell. Recently, some banks have rushed in to serve customers who would otherwise not be able to obtain a credit card or who fail stringent credit checks.
Some of his BNPL lenders impose late fees, and failing to pay could also affect the consumer's credit rating.
The FCA did not identify any lenders on Friday, but in February it announced that BNPL operators, including Clearpay, Klarna, Laybuy and Openpay, had been identified as having potential harm to their customers. I told him to change the contract.
The Consumer Rights Act will have to be used for that and the UK will hold public consultations on legislation to introduce affordability checks for her BNPL.
Klarna said on Friday that the company's advertisement complies with her FCA's rules and makes clear the consequences of failing to pay.
"We will continue to seek proportional regulation of the industry so that consumers are protected regardless of the provider they choose," said his Klarna spokesperson.
Bain&Co reported last year that BNPL transactions represent his 5% of the UK e-commerce market in 2020, or £6.5bn, with an annual growth rate of 60%. said to be 70% from
The FCA said it would exercise criminal and regulatory enforcement powers for violations of its rule that FCA-licensed companies must approve all financial promotions. (Reporting by Hugh Jones, Editing by Jan Harvey and Alexander Smith)