Buy Now, Pay Later rules are changing in days – what it means for Klarna, Clearpay and other customers

Millions of people now use Buy Now, Pay Later (BNPL) services such as Klarna and Clearpay to spread the cost of purchases.

However, up until now, these firms have not been regulated by the Financial Conduct Authority (FCA).

This means customers have not had as much consumer protection as they do when using other forms of borrowing such as credit cards.

From 15 July, this is changing and customers will now be going through affordability checks to make sure they can afford to repay, as well as having the right to complain to the Financial Ombudsman Service (FOS) for the first time.

The changes are designed to make Buy Now, Pay Later borrowing safer for users.

How are Buy Now Pay Later rules changing?

From 15 July 2026, most Buy Now, Pay Later products will have to follow many of the same consumer protection rules as other regulated lenders such as banks and credit card providers.

One of the biggest changes is that Buy Now, Pay Later providers will have to carry out affordability and creditworthiness checks before offering customers credit.

This is to help stop people borrowing more than they can realistically afford to repay.

Providers must also give customers clearer information before they agree to a Buy Now, Pay Later loan.

This includes:

• How much you'll repay.

• When repayments are due.

• What happens if you miss a payment.

• Any fees or charges that could apply.

Another major change for users is that they will be able to complain the Financial Ombudsman Service (FOS) if they can't resolve the issue directly with their lender.

The Ombudsman is a free, independent service that settles disputes between consumers and regulated financial firms.

Firms will also have to support and identify customers experiencing financial difficulty and provide the appropriate support.

Which Buy Now, Pay Later agreements are covered by the changes?

The new rules apply to third-party Buy Now, Pay Later lenders.

This is where the company providing the credit is different from the retailer selling the goods. For example, if you are using Klarna to buy an item from Argos.

It won't apply to a retailer that provides its own interest-free instalment plan directly to customers rather than using a third-party lender.

As the rules take effect on 15 July, they won't apply to agreements entered before this date.

Will Buy Now, Pay Later credit checks make it harder to use Klarna and other providers?

If you are financially stretched and could find the repayments on Buy Now Pay Later unaffordable, you may find that it becomes more difficult to use.

Some people who would previously have been approved may now be declined.

The FCA says the aim is to encourage responsible lending rather than stop people using Buy Now, Pay Later altogether.

How to complain about a Buy Now, Pay Later provider from 15 July

If something goes wrong or you're not happy with the service that you have received from a Buy Now Pay Later lender, complain to the provider first - such as Klarna or Clearpay.

Explain the problem and give them the opportunity to resolve it.

If you're unhappy with the company's final response, you can then refer the complaint to the Financial Ombudsman Service.

Complaints could include concerns about affordability checks, not understanding the agreement, the lender not treating you fairly and other disputes.

If the Financial Ombudsman decides in your favour, it can order the financial firm to put things right. This could mean paying compensation, refunding interest, fees or charges or correcting mistakes.

The service is free for consumers to use, and you don't need a solicitor or claims management company to make a complaint.