CP18/43: High-Cost Credit Review: Feedback on CP18/12 with final rules and guidance and consultation on Buy Now Pay Later offers

Open consultation: CP18/43
18/12/2018
Consultation closes
18/03/2019
18/03/2019
Final rules
June 2019

As part of our review of high-cost credit products, we have published our feedback to CP18/12 and final rules and guidance in relation to home-collected credit, catalogue credit and store cards.

Read CP18/43 (PDF)

As part of our work to foster alternatives to high-cost credit, we have also published finalised guidance for registered social landlords to provide greater clarity about the activities for which they are likely to require authorisation as credit brokers.

We are also consulting in this paper on extending some of our store card and catalogue credit remedies to point of sale retail finance firms providing Buy Now Pay Later (BNPL) offers as well as new remedies to make such offers more transparent and ensure that consumers do not pay backdated interest on sums repaid within the offer period.

This paper:

  • Responds to the feedback we received to CP18/12 which sought views on measures to reduce consumer harm and strengthen protections for consumers using home-collected credit, catalogue credit and store cards.
  • Sets out our final rules and guidance, including, as part of our work to foster alternatives to high-cost credit, finalised guidance for registered social landlords (RSLs).
  • Consults on a package of remedies for Buy Now Pay Later (BNPL) offers following the outcome of further work to look at outcomes for consumers.
  • Provides a brief update on our work to promote alternatives to high-cost credit.

Taken together, we expect these measures to lead to improved sales practices, fewer hidden costs to consumers, protection against harmful repeat borrowing and more control for consumers over whether they want to discuss new or additional borrowing.

As part of our Review, we have also separately published consultation papers on changes for the rent-to-own market including proposals for a price-cap and a package of changes on overdrafts.

Who this applies to

This affects:

  • consumer credit lenders that provide, home-collected credit, catalogue credit and store cards
  • firms who offer BNPL
  • RSLs, credit unions and community development finance institutions (CDFIs) and commercial innovators in alternatives to high-cost credit
  • stakeholders interested in helping consumers and firms looking to provide alternatives to high cost credit

It will also be of interest to trade bodies representing consumer credit lenders, consumers and consumer representative organisations.

What you need to do

Please send us your comments by 18 March 2019.

Online response form

You can also:

  • email your responses to [email protected] or
  • write to: Alison Wade, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN

Firms will need to comply with our final rules and guidance by 19 December 2018 or after implementation periods of three or six months depending on the specific measure. Further details are set out in our paper.

Stakeholders interested in our proposals for BNPL offers must respond to our consultation by 18 March 2019 by answering the questions listed at Annex 1 via our online response form or by emailing [email protected].

Next steps

We intend to publish final rules on BNPL offers in June 2019.