New Buy Now Pay Later regulations finalised: key changes since the consultation

• Consumer Duty: The Duty remains a core part of the FCA’s approach, specifically the consumer understanding and support outcomes. In particular, the new DPC lenders who are preparing to enter the FCA’s temporary permissions regime (TPR) (notification window opening on 15 May 2026) should begin planning early to ensure operational readiness and full compliance with the Duty from the Regulation Day. This includes demonstrating fair value, delivering customer support and overall delivering good outcomes for retail customers, as well as the other rules they will need to comply with.
• Disclosure: The FCA is applying tailored Consumer Credit Sourcebook (CONC) rules to DPC lenders to provide clear and timely information on repayment terms and risks, and support for customers in financial difficulty.
• Creditworthiness: DPC lending will be subject to the FCA's creditworthiness rules in CONC 5.2A, without any modifications. CONC 5.2A.33R requires firms to establish, implement and maintain clear and effective policies and procedures for assessing creditworthiness, including affordability. These should set out the principal factors to be considered when assessing creditworthiness and must be approved by the firm’s senior management. This would mean relevant lenders will have to establish adequate governance and systems and controls in place to ensure that they meet the requirements under those rules and also that are suitable for DPC lending. Any use of automation or innovative technology to support lending decisions must be tested to ensure their effectiveness in producing responsible and sustainable lending decisions. Further, a creditworthiness assessment will be required for each DPC transaction, even if they are for very small amounts including DPC agreements of £50 or less.
• Application of the wider Handbook: Key Handbook requirements beyond CONC will apply to DPC lenders, including requirements under Principles for Businesses (PRIN), Threshold Conditions (COND), Systems and controls (SYSC) and existing regulatory reporting requirements. Firms in the TPR that are not otherwise authorised will not be subject to the Senior Managers and Certification Regime (SM&CR) while they hold temporary permission. Firms already authorised for other activities, but in the TPR for DPC, will have the SM&CR disapplied to their DPC activities until they are fully authorised for those activities.  
• Dispute resolution: In line with the FCA’s complaints handling rules in its Dispute Resolution (DISP) sourcebook, DPC lenders will need to ensure fair and prompt resolution of complaints and allowing consumers to escalate unresolved issues to the Financial Ombudsman Service (FOS). The FOS’s compulsory jurisdiction (CJ) will be extended to cover regulated DPC activities from Regulation Day.  However, the FCA is proposing to suspend complaints reporting requirements for DPC activities for firms in the TPR until they obtain full authorisation. The FCA does not propose extending Financial Services Compensation Scheme (FSCS) coverage to DPC activities, consistent with other consumer credit activities.

1. Key product information – content adjustments

The draft rules proposed that certain information be included in the “key product information” provided to consumers before entering a DPC agreement. The FCA has removed the requirement to include in the “key product information”: 

• The existence of any rights to withdraw from or cancel the agreement, to complete payments ahead of time, and to refer a complaint to FOS.
• An adequate explanation of what a continuous payment authority is and how it works.

Instead, this information now forms part of the “additional product information”, which must be given or made available to the customer before the agreement is entered into. However a new requirement has been added to include in the key product information a statement that information about certain rights is set out in the additional product information. These changes are being made to ensure that the key product information focuses on content which is most important for consumers’ decision making.

2. Credit Reference Agency (CRA) information

The draft rule required lenders to indicate in the key product information whether they “will” obtain information from a CRA before deciding whether to proceed with the agreement. The rule is amended so that a firm must indicate whether it “will (where this is known) or otherwise may” obtain information from a CRA. This change reflects that the key product information is likely given before the firm has decided whether it will obtain CRA data.

3. Missed payment notices – content clarification

The proposed rules required firms to provide information to borrowers who have missed payments, including the “immediate or future adverse consequences” for the borrower. The rules are clarified so that communications about missed payments do not necessarily need to explain all potential future adverse consequences. Instead, firms must provide sufficient information about: 

• Any adverse consequences for the customer arising out of the missed payment; and
• Any other adverse consequences for the borrower that the firm considers are likely to arise out of the missed payment.

This aims to ensure the information is proportionate and relevant to the customer’s specific circumstances, rather than overwhelming them with every possible adverse outcome.

4. Signposting to free debt advice

The CP proposed that firms provide information to borrowers about missed payments and give notice before taking certain actions (e.g. enforcing the agreement or terminating it) but did not require signposting to debt advice at these stages. The final rules require firms, when giving notice before taking certain actions (such as terminating a DPC agreement or enforcing a term), to: 

• Signpost to free and impartial money guidance and debt advice; and
• Effectively communicate the potential benefits of accessing it.

This is in response to feedback from consumer representatives and is intended to improve outcomes for consumers in financial difficulty.

5. Guarantor notifications

The draft rules proposed that DPC lenders notify guarantors when a borrower has missed a payment. The FCA has decided not to require DPC lenders to notify guarantors of missed payments, aligning DPC with other regulated agreements where such notification is not required under the Consumer Credit Act 1974 (CCA).

6. Timings and medium of communication

The CP did not specify the medium or precise timing for communications to borrowers. The final rules confirm that firms must communicate with a borrower “as soon as possible” after a missed payment and provide “reasonable notice” before taking certain actions, but do not prescribe the medium of communication. Firms must use their judgement and be able to justify what is reasonable, having regard to the customer’s circumstances.

7. Dispute resolution

As opposed to the original proposals, the FCA is not expanding FOS’ Voluntary Jurisdiction (VJ) to cover DPC activities by a respondent from a European Economic Area (EEA) or Gibraltar establishment.

Third party lenders offering currently exempt DPC agreements, and who are not already authorised for Article 60B activities, will need to enter the TPR if they want to undertake newly regulated activity on or after Regulation Day. To prepare for Regulation Day, DPC lenders will need to consider the final rules and make the necessary changes to their systems and controls. Following the consultation in July 2025 firms who had already put in place arrangements to operationalise some of the requirements may now need to change their processes in light of the finalised rules. FCA expects DPC lenders to ensure operational readiness for Regulation Day and to be fully compliant with FCA requirements including Consumer Duty.