Buy Now, Pay Later Rules Changed on 15th July 2026
Buy Now, Pay Later (BNPL) rules changed on 15th July 2026, when the Financial Conduct Authority (FCA) began regulating a specific type of interest-free borrowing known as Deferred Payment Credit (DPC). Customers using covered agreements now have stronger protections, including affordability checks, clearer information before borrowing and support if repayments become difficult. The change does not cover every product described as BNPL, and agreements taken out before the start date remain outside the new regime.
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What changed on 15th July 2026?
Before 15th July 2026, this type of interest-free deferred payment credit was generally outside FCA regulation. Lenders did not need FCA permission for this activity or have to follow the FCA’s rules for it. From 15th July 2026, lenders entering new covered agreements must be FCA-authorised for the relevant activity or have the applicable temporary permission, and must follow the rules.
The purpose is to make borrowing clearer and more affordable, and to give customers support and a route to complain when a lender gets things wrong. A lender entering a new covered agreement must have the relevant FCA authorisation or temporary permission. The FCA’s temporary-permissions registration window has now closed, so firms without the required status cannot start offering new covered agreements.
Which Buy Now, Pay Later agreements are covered?
BNPL is a broad label, not one single type of credit. The new rules cover Deferred Payment Credit (DPC): interest-free credit that must be repaid in 12 or fewer instalments over 12 months or less. The agreement is covered when the credit comes from a third-party lender and the legal conditions for the arrangement between the lender and retailer are met. A retailer offering its own payment plan for its own goods or services is not covered by this particular set of rules.
Some other BNPL agreements may already be regulated under existing consumer-credit rules, including some agreements that charge interest. The rules depend on the type of credit and the agreement. Do not assume that every payment option labelled BNPL has the same legal status or protections.
What is generally within the new regime?
In simple terms, the new rules are aimed at interest-free instalment credit provided by a separate lender to pay for a purchase from a retailer. The credit must be repayable in no more than 12 instalments over 12 months or less, and the legal conditions for the lender-retailer arrangement must be met.
What is not covered in the same way?
A payment plan provided directly by a retailer for its own goods or services is not covered by this particular DPC regime. Agreements made before 15th July 2026 also remain outside the new rules. Other exclusions cover certain insurance-premium financing, employee borrowing and specified arrangements offered by registered social landlords. Broking DPC agreements is also exempt from regulation under this framework.
If you are unsure whether a payment plan is covered, check the lender’s regulatory status and the terms of the agreement. The product name alone is not enough to establish which rules apply.
Important exceptions
The new protections do not automatically apply to every Buy Now, Pay Later product. Agreements entered into before 15th July 2026 remain outside this new regime. Deferred Payment Credit provided by the same business selling the goods or services is also generally outside these rules. Some specific types of agreement are excluded too, so check the details of your own agreement with the provider.
Example: what this means at checkout
If you buy a £120 item from a retailer and choose a qualifying pay-in-instalments plan provided by a separate lender on or after 15th July 2026, the lender must provide key information about the repayments and check affordability. If the retailer itself provides the credit, or you entered the agreement before that date, these new protections may not apply.
What protections do customers now have?
For covered agreements made from 15th July 2026, lenders must check whether the borrowing is likely to be affordable, give customers key information before they agree, and support customers who have difficulty repaying. These rules do not guarantee approval, prevent every case of unaffordable borrowing or remove the obligation to repay.
What lenders must now do
Affordability checks
Lenders must check whether repayments are likely to be affordable. The checks must be proportionate to the agreement and the customer’s circumstances, but they cannot guarantee that borrowing will be affordable for everyone.
Unclear repayment terms
Before you agree, the lender must explain key details, including how much you are borrowing, when and how much you must repay, any late fees, and the rights and protections that apply.
Payment difficulties
Lenders must follow FCA rules for customers who miss payments or are facing financial difficulty, including appropriate support.
A complaint with nowhere to go
You can complain to the lender first. If you are unhappy with its final response, or it has not responded within the required time, you may be able to take the complaint to the Financial Ombudsman Service. Its eligibility rules apply.
What if you cannot keep up with repayments?
If you miss a payment, the lender must contact you and explain what this means. If you think you may struggle to pay, contact the lender as soon as possible rather than ignoring reminders. FCA rules require lenders to support customers who are, or may be, in financial difficulty. They must also give relevant information about free, impartial money guidance and debt advice in certain arrears situations.
These rules do not cancel the debt or guarantee that late fees will never apply. Check your agreement to understand any fees and payment dates, and ask the lender to explain the options available in your circumstances. You can also get free, impartial help from MoneyHelper’s debt guidance.
What if something goes wrong with a purchase?
If goods bought with a covered DPC agreement are faulty, do not arrive or there is another problem with the purchase, you may have a claim against the lender as well as the retailer. The FCA says Section 75 of the Consumer Credit Act can apply to regulated DPC agreements. This can make the lender responsible alongside the retailer in qualifying cases, but whether it applies depends on the agreement and the circumstances.
This does not mean every BNPL purchase automatically qualifies for a refund or every protection associated with a credit card. The legal conditions for a claim must be met. Keep your receipt, order confirmation, messages with the retailer and credit agreement, and raise the problem with the retailer and lender.
How to complain about a BNPL lender
If you believe a lender has failed to follow the rules, make a complaint to the lender first and explain what happened, what you believe went wrong and the outcome you are seeking. Keep copies of your complaint and the lender’s response.
If you are unhappy with the lender’s final response, or it has not sent one within eight weeks, you may be able to take your complaint to the Financial Ombudsman Service. Its BNPL service can consider eligible complaints about agreements taken out on or after 15th July 2026 and issues involving regulated firms. It looks at each case individually, so a refund or compensation is not automatic.
What about existing BNPL agreements?
The date of the agreement matters. The FCA says DPC agreements entered into before 15th July 2026 remain outside the new regime. The new protections therefore do not automatically apply retrospectively to an older agreement just because repayments are still being made after that date.
Agreements entered into from 15th July 2026 may be covered if they meet the DPC definition and do not fall within an exclusion. Other BNPL or credit products may already have been regulated under separate rules. If you have an older agreement or an arrangement provided directly by a retailer, check the terms and seek individual guidance where needed.
How to check your lender
Use the FCA’s Firm Checker to search for the lender. Follow the tool’s current instructions to select the relevant borrowing activity and check whether the firm is authorised and has permission to provide the service you need. The FCA notes that a firm’s entry may not cover every product or service it offers, so check the permissions shown rather than relying on the firm’s name alone. If the lender appears to be operating under temporary permission for Deferred Payment Credit, check the FCA’s guidance for firms on regulating Buy Now, Pay Later for the current temporary-permissions information. Do not assume that a listing, by itself, means every product is covered by the new rules.
If you are about to use BNPL, read the repayment schedule and late-fee details, consider whether the instalments fit your budget and avoid taking on multiple payment plans without a clear view of the total due each month.
Buy Now, Pay Later FAQs
This article provides general consumer information and is not legal or financial advice. The rules that apply depend on the type of agreement and the circumstances. Check the latest FCA guidance or seek appropriate advice if you need help with an individual case.
