Buy Now, Pay Later Went Wrong? You Can Now Complain to the Financial Ombudsman — Here's How

Buy Now, Pay Later (BNPL) providers such as Klarna, Clearpay and PayPal's Pay in 3 have operated for years largely outside consumer credit rules. That changed on 15 July 2026, and it's one of the most consequential shifts in everyday consumer finance this summer — with a right most shoppers don't yet know they have.

What actually changed

From 15 July 2026, Deferred Payment Credit (DPC) — the interest-free credit model underpinning BNPL — was brought fully into the FCA's regulatory perimeter. BNPL lenders must now run proportionate affordability checks before approving credit, give clearer upfront information about repayment dates, amounts owed and late fees, and support customers who fall into financial difficulty in the same way a credit card provider would be expected to.

The single biggest practical change for consumers: users of regulated BNPL agreements now have access to the Financial Ombudsman Service (FOS) for unresolved complaints — something that simply wasn't available before, because BNPL sat outside the Consumer Credit Act framework that gives that right to other lenders.

For scale: more than 100 million UK BNPL transactions took place in 2025, worth over £7bn, so this is a change that touches a genuinely large slice of everyday shopping, not a niche product.

Checklist: what to do if a BNPL purchase goes wrong

1. Complain to the BNPL provider first. By law, they must now have a formal complaints process, just like a bank or credit card issuer — check the app or your agreement for "how to complain."
2. Give them eight weeks. Regulated firms generally have up to eight weeks to resolve a complaint before you can escalate it.
3. If unresolved (or you get a final response you disagree with), take it to the Financial Ombudsman Service at financial-ombudsman.org.uk — this route is free and didn't exist for BNPL disputes before 15 July 2026.
4. Check the affordability check was actually done. If you were approved for BNPL credit you couldn't realistically afford, that's now a valid basis for a complaint, in the same way irresponsible lending complaints work for credit cards and loans.
5. Keep records — screenshots of the offer terms, repayment schedule and any late fee charged, since regulated firms must now disclose these clearly and you'll need evidence if a fee was applied incorrectly.
6. Check your statement for late fees. Providers must now give clearer information about late fees before you buy — if a fee doesn't match what was disclosed, that's specifically what the new rules are meant to catch.

Why this matters beyond the complaints process

The affordability-check requirement is arguably bigger than the Ombudsman access, even if it's less visible day-to-day. BNPL has historically been criticised for approving credit within seconds with minimal scrutiny, which critics say encouraged people to take on multiple concurrent BNPL debts they couldn't track. Mandatory affordability checks won't stop all irresponsible borrowing, but they create a paper trail — and a legal basis for complaint — that didn't exist before.

How the UK compares internationally

In the United States, the Consumer Financial Protection Bureau (CFPB) issued interpretive guidance treating BNPL products similarly to credit cards under the Truth in Lending Act, though enforcement has been less centralised than the UK's single-regulator approach via the FCA. Australia moved earlier than the UK, bringing BNPL under its National Consumer Credit Protection Act from mid-2025 following the "Low Cost Credit Contracts" reforms, with a broadly similar affordability-check requirement.

Key Numbers

• Regulation effective date: 15 July 2026
• 2025 UK BNPL transaction value: £7bn+
• 2025 UK BNPL transaction count: 100 million+
• Standard firm complaint-response window: 8 weeks, before Financial Ombudsman Service escalation applies

Sources

• Credit Strategy: BNPL comes under UK regulation from July 2026
• Reed Smith: New FCA Regulation of Buy Now Pay Later
• Yahoo Finance: UK regulator brings BNPL services under full consumer credit regulation
• MoneySavingExpert: Buy now, pay later rules finalised

Educational content only — not financial advice.