Major Buy Now Pay Later firm Clearpay has been closing customer accounts ahead of a significant rule change, leaving many users frustrated. The company, which offers installment payment services, has been shutting down accounts without prior notice, sparking complaints on social media.
Customer Reactions
One customer expressed their dismay on Facebook: "After using Clearpay for years and having got my limit of £1,500 they have closed my account… I use this regularly and am quite upset that they have done this after using it for years." Another added: "I’ve had the account for years and not missed any payments. I’ve been a loyal customer… It’s ridiculous and unfair for them to do this without contacting me with a reason why."
New Regulations on the Horizon
From next month, Buy Now Pay Later services will be subject to the Consumer Duty, bringing them in line with traditional lenders such as banks and credit card companies. The new laws aim to provide protections for the 11 million people who use BNPL, ensuring they are not lent money they cannot afford to repay.
Sarah Pritchard, deputy chief executive at the Financial Conduct Authority (FCA), stated: "We want the Buy Now Pay Later sector to thrive – it provides an important source of credit to many – and we will continue to support firms who want to develop innovative new products. But crucially, no one should be lent to if they're unable to repay, because that could worsen their financial situation. Now Parliament has given us the powers, we’re putting in place proportionate protections for the 11 million people who use it."
What the New Rules Mean for Consumers
Under the new regulations, lenders must be authorised by the FCA to provide BNPL services. Consumers will receive clear, upfront details about their agreements, including payment due dates, amounts, and consequences of missed payments. Lenders are required to carry out proportionate affordability checks before offering BNPL and must provide support to customers facing financial difficulty, including directing them to free debt advice.
If something goes wrong, consumers will have the right to complain to the Financial Ombudsman Service.
