BNPL lenders in the UK must be authorized by the Financial Conduct Authority and run affordability checks on every purchase, even those under £50, once the sector falls under FCA supervision on July 15. Purchases over £100 and under £30,000 gain Section 75 protection, making the lender jointly liable with the merchant, for agreements made after that date, and consumers can escalate complaints to the Financial Ombudsman. Merchant marketing that counts as a financial promotion will often need approval by an authorized firm, and Fair4All Finance estimates the tighter checks could exclude 10-30% of current BNPL users. The rules stem from a government decision to bring deferred payment credit under the FCA, finalized in a February policy statement, with a transition regime letting unauthorized lenders operate while they seek authorization.
