The FCA has made its final rules that will apply to firms offering Buy Now Pay Later (Deferred Payment Credit) products that fall newly within the scope of the RAO from 15 July. The rules are effectively a tailored version of the more stringent rules for regulated credit agreements. The FCA took the Consumer Duty as the basis for making the more detailed new rules, which focus on:
- clear information;
- affordability checks – lenders will need to carry out a proportionate affordability assessment;
- support for consumers in financial difficulty; and
- the ability of customers to complain to FOS.
There is no new Sourcebook, as most of CONC will apply, as will the FCA’s existing creditworthiness rules, and there will be specific new rules within CONC on product information, and requirements on information firms must provide when borrowers miss a payment. The FCA will also apply existing regulatory reporting requirements to DPC lenders, including Product Sales Data and aggregate annual returns. Other key parts of the FCA Handbook, such as PRIN, COND, GEN and SYSC and relevant parts of SUP and EG.
Any firm offering BNPL products that benefit from the current exemption for short term interest free products, but which will require authorisation to continue to provide them, must register for a temporary permission before 15 July – and will be able to do so from 15 May. Then they will have 6 months to complete their application for full authorisation.