The FCA Will Crack Down Hard On Unauthorized BNPL Providers

BNPL solutions have popped up everywhere in the United Kingdom. As is to be expected, not all of these companies are approved by the FCA, nor do they provide legal services. However, a new crackdown on unauthorized BNPL providers is underway and should help clean up the landscape a bit.

FCA Get Aggressive On BNPL

Whenever a finance industry vertical becomes more popular, it will attract much unwanted attention. More often than not, scammers and other nefarious individuals will try to defraud consumers through various means. The explosive growth of BNPL providers in the United Kingdom indicates not all of these companies can be legitimate, and the FCA wants to take action. 

Any unauthorized or unapproved provider will now face criminal charges unless they seek approval from the FCA. Additionally, authorized companies are in the crosshairs over their advertising and promotional campaigns. All promotions must comply with FCA guidelines unless an exemption applies. Failure to do so will result in the same criminal charges being applied. 

FCA Executive Director of Consumers and Competition Sheldon Mills adds:

“As we face a cost-of-living crisis, consumers are having to make difficult decisions about their finances and how they pay for goods and services. Firms need to ensure consumers, particularly those in vulnerable circumstances, are equipped with the right information at the right time, so they can make effective, timely and properly informed decisions. It is vital that adverts are clear, fair and not misleading.”

The fight against unauthorized and borderline-violating BNPL providers isn’t new in the UK. In 2022, the FCA took action against over 4,200 firms, confirming the predatory nature of this industry. More regulatory measures and compliance requirements are on the table and will likely be introduced in 2023. The FCA takes consumer protection very seriously and will do whatever is necessary to achieve that goal.