FCA to br given new powers for ''pay later'' credit.

Draft pro­pos­als have set out new powers for the watch­dog to clamp down on the pop­u­lar short-term credit products.

Details will be pub­lished today.—The main fin­an­cial watch­dog is set to receive sweep­ing powers to clamp down on buy now, pay later com­pan­ies found in breach of its rules.
The powers would include ban­ning offend­ers from fur­ther lend­ing under draft gov­ern­ment pro­pos­als aimed at giv­ing greater pro­tec­tion to con­sumers who use the pop­u­lar but con­tro­ver­sial short-term credit product.
Buy now, pay later products allow con­sumers to repay the cost of a pur­chase in instal­ments, which are interest­free so long as they are paid on time.
The use of these loans has grown rap­idly, driven by the big rise in online shop­ping dur­ing the pan­demic. But the mar­ket is unreg­u­lated, draw­ing cri­ti­cism from debt char­it­ies, civil soci­ety groups and politi­cians about con­sumers tak­ing on unaf­ford­able levels of debt.
Other pro­posed reg­u­la­tions include requir­ing lenders to provide cus­tom­ers with more inform­a­tion about their loans. Con­sumers will also be able to bring com­plaints against buy now, pay later com­pan­ies to the Fin­an­cial Ombuds­man Ser­vice, which adju­dic­ates on con­sumer dis­putes.
Last August, the FCA warned lenders about fol­low­ing rules on pro­mo­tions, hav­ing found social media posts pro­mot­ing the loans without high­light­ing the con­sequences of a fail­ing to repay them.

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