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Young people! Here's what you need to know about ‘buy now, pay later' loans
Young people! Here's what you need to know about ‘buy now, pay later' loans

The Independent

time5 days ago

  • Business
  • The Independent

Young people! Here's what you need to know about ‘buy now, pay later' loans

Klarna and its pals have taken over the British High Street, with buy now pay later (BNPL) loans exploding in popularity. The market ballooned from £60m in 2017 to more than £13bn last year. One in five Britons used it to borrow money over the 12 months to May 2024. Regulatory oversight is long overdue and with legislation finally on the books, the Financial Conduct Authority has delivered its proposals. They are really quite mild. It is worth remembering that the government decided not to fully apply the Consumer Credit Act to these products even though, I repeat, they are loans. This has tied its hands to some extent. Under the plans, BNPL lenders will have to secure authorisation, check that people can afford to repay their loans, spell out the risks and charges for late payment, and offer more support to those who get into trouble. That could include forbearance (the sector will just love that one). Consumers will also be able to approach the Financial Ombudsman in the event of disputes. These loans are disproportionately popular among younger people (30 per cent of adults aged 25-34 used them at least once in the year to May '24), poorer people (nearly one in three adults with 'low resilience' took them out) and those living in the most deprived parts of Britain (29 per cent). I'm not about to deny that they can prove useful. Deferring the cost of purchasing a new school uniform for the kids for 30 days, or paying in three monthly installments, could be helpful to a low-income parent. But that's not how these things are typically used, and they are so easy to access it is very easy to get into trouble with them if they aren't used carefully. In my view, this is the crack cocaine of lending. The business model speaks to that. BNPL firms receive a commission on each transaction from the retailers they work with. Why are the latter willing to pony up? Because BNPL loans encourage consumers to spend more. Commissions aren't the only revenue stream available to firms in the sector, however. They also typically charge late fees and the FCA found what it called 'high arrears levels' in the sector with some firms generating 'significant revenue' from these charges. It further found that consumers weren't always aware that they could get hit for failing to pay on time. Critics of regulation argue that people shouldn't need handholding or nannying. The watchdog found that the most common use of BNPL in the 12 months to May 2024 was for lifestyle and beauty purchases (41 per cent), followed by 'treating myself or other people' (37% per cent). Surely it would be churlish to deny people the chance of a good time? I get the point. I do. But consumers should know what they're getting into and the sector hasn't always been good at explaining the risks. Indeed, the regulator criticised what it termed 'benefit framing' where firms emphasise the good bits and downplay the dangers. For the record, Klarna described the proposals as 'a win for the consumer' while rival Clearpay said it would 'support the FCA as it consults on and finalises its specific rules for the sector'. Make of that what you will. I still fear that BNPL's explosive growth, and some of the practices found by the regulator, means the potential is there for a serious scandal. Meanwhile we're likely to see snowballing numbers of cautionary tales, in which people find themselves plunging into financial hell. That being the case, it is regrettable that the wheels of regulation are still moving at the speed of a sloth with a stitch: After five years of consultation with the Treasury, oversight of the sector still won't finally come in until next July.

Financial complaint numbers at historically high levels
Financial complaint numbers at historically high levels

NZ Herald

time15-07-2025

  • Business
  • NZ Herald

Financial complaint numbers at historically high levels

The Financial Services Complaints Limited received 1469 complaints in the year to June 30. Photo / 123RF Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech. The Financial Services Complaints Limited received 1469 complaints in the year to June 30. Photo / 123RF Financial complaint numbers remain at historically high numbers and show no sign of easing, the Financial Ombudsman says. New annual figures show the complaints service received 1469 complaints in the year to June 30, up from 1426 the previous year. 'We're not yet seeing signs of complaints reducing since increasing rapidly two years ago in the wake of Covid-19,' said Financial Ombudsman Susan Taylor. 'What's changed is the spread. Complaints are now more evenly distributed across a broader range of financial services, rather than being concentrated in just a few areas like non-bank lenders.' Lenders accounted for the largest share of complaints at 38%, though many were resolved before escalating to a dispute needing formal investigation.

Bring on the BNPL regulation, but let's get it right!: By Willem Wellinghoff
Bring on the BNPL regulation, but let's get it right!: By Willem Wellinghoff

Finextra

time26-06-2025

  • Business
  • Finextra

Bring on the BNPL regulation, but let's get it right!: By Willem Wellinghoff

The rapid expansion of Buy Now Pay Later (BNPL) services has undeniably reshaped the consumer credit landscape, offering a flexible and accessible payment method that caters to diverse lifestyles. However, this growth has simultaneously brought into sharp focus the imperative for suitable regulation. While further regulation is welcome in the wake of the Consumer Credit Act review, it must strike a delicate balance to safeguard consumers without stifling innovation and the UK's competitiveness. We mustn't forget that BNPL serves as an inclusive payment method, empowering individuals to manage their finances by spreading payments in a way that suits their needs. This aspect of inclusivity, allowing consumers a wider choice in how they pay for goods and services, remains a vital requirement. The emotional connection consumers feel to BNPL, stemming from its ability to provide informed choice and accountability, is also a key factor in its enduring appeal. However, the inherent lending essence of BNPL, despite its "payment method" perception, necessitates a strong focus on consumer protection. Government initiatives including introducing affordability checks and granting consumers the right to complain to the Financial Ombudsman from 2026, are significant steps towards improving perceptions of this newer form of borrowing. The new regulations will ensure a consistent standard across the industry, fostering greater consumer confidence and fairer access to refunds. Regulation sweet spot The challenge lies in ensuring regulation is proportionate. An overly stringent approach risks phasing out an important product in the market, hindering the very inclusivity that BNPL provides. In particular this could be an issue in the payments ecosystem where offering BNPL through orchestration might even potentially be considered as a form of credit broking which would require payment service providers and orchestrators to potentially enhance their regulatory permissions to include consumer credit activities, and be subject to additional onerous rules. The UK's National Payments Vision emphasises continued growth and innovation, and any regulatory framework must align with this. The balance required between managing innovation, suitability tailored to individual needs, and robust regulation is a complex tightrope walk. Companies like Ecommpay are already operating with a strong compliance and regulatory lens in our product design, recognising the need for emotionally empowering choices for consumers. The maturing BNPL market now offers a diverse array of solutions, and for e-commerce merchants, the key is to collaborate with payment providers who can offer a comprehensive range of credit options. Solutions like Visa Instalments, which leverage existing card infrastructure and eliminate the need for additional credit checks, can significantly improve checkout performance, especially in high-value sectors such as travel and luxury goods. These instalment solutions, whether interest-free or low-cost, provide greater financial flexibility for customers. Empowering payments and protecting customers Ultimately, however, the future of BNPL lies in a nuanced approach to regulation. While the core emphasis must be on affordability, transparent reporting to credit reference bureaus, and recognising vulnerability in consumers who might overextend themselves, this must not come at the expense of choice and innovation or restricting merchants' ability to offer payment methods that customers have come to use and trust. The goal is to cultivate an environment where BNPL continues to be an inclusive and empowering payment method, while simultaneously ensuring robust consumer protection and maintaining the UK's competitive edge in the global payments ecosystem. Payment providers, by staying abreast of the evolving regulatory landscape and offering diverse, compliant solutions, will be instrumental in achieving this delicate balance.

Tech expert shares important iPhone settings change that stops scammers
Tech expert shares important iPhone settings change that stops scammers

Daily Record

time23-06-2025

  • Business
  • Daily Record

Tech expert shares important iPhone settings change that stops scammers

The feature that could be the difference between keeping your family safe and falling victim to increasingly sophisticated scam calls We all know the feeling of accepting a call from an unknown number on a random afternoon and finding out we are magically owed thousands of pounds in compensation from an accident we never had. Or that we need to divulge sensitive financial information to people we do not recognise on the other end of the phone. Sadly, scams are a prevalent issue in Scotland, and impact a large number of people across all age groups. ‌ In the financial year spanning April 1, 2024, to December 31, 2024, Scottish residents reported around 1,300 fraud and scam complaints to the Financial Ombudsman, up more than a third from 950 complaints from the same period last year. ‌ What's more, a report by Age Scotland found that over 100,000 older Scots are targeted, with 12 per cent of those targeted having responded to a scam call. When scams do succeed, they can be devastating; wiping out savings, damaging credit, and leaving victims feeling violated and vulnerable. However, a solution may be in sight. Tech expert OddsMonkey claim Apple's new Call Screening feature, available now for developers and coming to public beta next month, represents a significant leap forward in protecting users from fraudulent calls. Building on the existing Live Voicemail functionality, it automatically gathers information from unknown callers before you even need to pick up. When an unknown number calls, your iPhone will answer automatically and prompt the caller to state their name and reason for calling. ‌ You'll see this information transcribed in real-time, allowing you to make an informed decision about whether to accept or dismiss the call. All processing happens on-device, ensuring your privacy remains protected. "This technology represents a fundamental shift in how we can protect consumers from increasingly sophisticated phone scams," says a spokesperson from tech software company OddsMonkey. ‌ "The ability to screen calls before they reach the user creates a vital barrier against fraudsters who rely on catching people off-guard." The feature will be particularly valuable for less tech-savvy family members who may be more susceptible to scam tactics. ‌ "We're seeing scammers evolve their tactics constantly, using AI to create more convincing personas," the spokesperson added. "Apple's Call Screening essentially turns the tables, using technology to protect users rather than exploit them." As mentioned, the timing couldn't be more crucial. A January survey commissioned by Hiya of 12,000 consumers across six countries found that a quarter of UK consumers received a deep fake voice call in the past year. Of those who received a deep fake call, two in five had been scammed – a third losing money and another third giving away personal data. Available as a free software update for iPhone 11 and later models, Call Screening should be your first stop in iOS 26's settings. Join the Daily Record WhatsApp community! Get the latest news sent straight to your messages by joining our WhatsApp community today. You'll receive daily updates on breaking news as well as the top headlines across Scotland. No one will be able to see who is signed up and no one can send messages except the Daily Record team. All you have to do is click here if you're on mobile, select 'Join Community' and you're in! If you're on a desktop, simply scan the QR code above with your phone and click 'Join Community'. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'.

Chase told to pay £150 to neurodivergent customer because app didn't have dark mode
Chase told to pay £150 to neurodivergent customer because app didn't have dark mode

Telegraph

time09-06-2025

  • Business
  • Telegraph

Chase told to pay £150 to neurodivergent customer because app didn't have dark mode

A bank was ordered to pay a neurodivergent customer £150 after she complained that its app didn't have a dark mode. A Chase customer – known only as 'Mrs C' – said that the bank's app was more difficult to use because she couldn't toggle the background colour. Those with neurodivergence – a blanket term often used for conditions including autism and ADHD – sometimes prefer using dark mode as it is said to reduce distractions, making it easier for them to focus. Mrs C, who has complained about the bank before, said the lack of a dark mode option 'made her feel as though she didn't matter' in a complaint to the Financial Ombudsman Service (FOS). She also claimed she has to use the app because an undisclosed disability means she cannot speak on the phone. An online FOS ruling, which found in her favour, said: 'For a bank to not have dark mode on their app disadvantages neurodivergent customers, including herself, and makes her feel not listened to and that Chase doesn't take accessibility for their customers seriously.' Chase told the FOS that changing the app to provide a dark mode would be a 'colossal and expensive task'. It also said that Mrs C had been a customer for more than a year when she complained in March 2024, and hadn't mentioned the lack of dark mode before. 'No evidence' Ombudsman Nicolas Atkinson wrote: 'There are certain groups of customers who've found that 'dark mode' makes websites and apps, for example, more accessible to them. That includes, for example, people who are neurodiverse.' He added: 'I can see that Chase offers this to its card merchant services customers, so it's disappointing to see it say that this would be a colossal and expensive task when it has no evidence to back this up.' Chase had offered to pay Mrs C £50 after mistakenly calling her to discuss her complaint, despite knowing that she was unable to speak on the phone. But the bank was ordered to pay an extra £100 because of the lack of dark mode although the ombudsman admitted that it was 'not an ideal solution'. Some banks already have apps with dark modes. In March this year, Lloyds introduced it on its mobile app for iPhones, and Spanish bank BBVA has a similar feature. Dark modes, which turn the background of an app to a darker black or grey colour, rather than white, can reduce eye strain and keep phone batteries running for longer. Chase, which was launched in the UK in 2021, is a digital-only bank which offers current and savings accounts. It is owned by JPMorgan, America's largest bank. A spokesman for Chase said: 'We offer a range of different accessibility options based on the needs of our customers, and in line with our commitment to create accessible and inclusive products and services for all. 'While we don't currently offer dark mode in our app, customers can make colour adjustments on their mobile phones – including colour inversion which will make the Chase app 'dark', if the device allows and the customer chooses to.'

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