No more 'Buy Now, Pay Later': UK govt wants people to stop taking loans, shuts unregulated loan schemes

London: Around 10 million Britons will be protected from taking out loans they cannot afford to repay through a crackdown on unregulated Buy Now Pay Later (BNPL) schemes, according to ministers. Reports claim that the cost-of-living crisis has recently boosted the market for BNPL as consumers are drawn to the promise of interest-free future payments for products they otherwise couldn’t afford at once. In exchange for a commission, companies let retailers to offer their items to customers on recurring payment plans lasting between six months and three years. Since regulation virtually eliminated the market for predatory payday loans two years ago, the overall amount of loans involved in BNPL schemes has increased dramatically. A survey released in November by Research and Markets.com predicted a 35% growth year over year for 2022. In the US, the amount increased from $2 billion (£1.7 billion) in 2019 to $24 billion in 2021. As per the reports, 12 percent of UK internet purchases in January were made with BNPL, according to Adobe Analytics, and StepChange, a debt relief organisation, said that 27% of Britons intended to utilise such a plan to pay for Christmas in 2016. Ministers and activists worry, however, that BNPL’s lack of regulation increases the likelihood that consumers may accumulate debt from many providers. The government intends to subject credit programmes to the Financial Conduct Authority’s regulation and grant consumers the right to file complaints with the ombudsman, according to city minister Andrew Griffith. Additionally, providers must provide clients with important information about their loans and issue only genuine credit that they can repay. The Treasury announced that it will collaborate with the financial services industry to make sure that credit is accessible to those who have difficulty getting it. The minister will meet with debt counsellors who will assist in providing free debt advice to more than 1.5 million people in England over the next three years at the “Financial Inclusion Policy Forum” on Tuesday in Birmingham. “People should have access to inexpensive financing, but with clear protections in place,” said Griffith. “These suggested regulations are crucial because of this. The summit being held today will also assist regulators and banks in better understanding how to assist those who feel trapped by debt and expand access to the financial system for those who have more difficulty doing so,” he added. On Tuesday, the minister will also call a summit of banks and debt-relief organisations. He will push the group to collaborate on improving financial literacy and removing obstacles that individuals with impairments, such as sight loss, may have when attempting to use financial services. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.