Unregulated Buy Now Pay Later Loans Lack Consumer Protections Until July 2026

Missing a payment on a 'buy now, pay later' plan can result in credit score penalties and debt collection actions. These services are credit products, not budgeting tools, according to Citizens Advice. Many of these arrangements fall under Deferred Payment Credit, which allows shoppers to split purchases into 12 or fewer interest-free instalments over 12 months or less. Deferred Payment Credit is currently unregulated. Lenders do not require Financial Conduct Authority authorization, and consumers lack formal complaint pathways and consumer protection rules. This changes on 15 July 2026, when DPC lenders must be authorized or enter a temporary permissions regime to provide users access to FCA-backed protections. These safeguards will not cover agreements made before that date. Retailers acting as lenders also remain permanently outside FCA oversight.