Martin Lewis has pleaded with the Government not to abandon plans to regulate 'buy-now-pay-later' (BNPL) schemes.
BNPL is a type of short-term financing that allows consumers to make purchases and pay for them at a future date, with the services offered by companies such as Klarna and Clearpay.
The Treasury announced back in February 2021 that it would bring unregulated BNPL services under the eye of the Financial Conduct Authority (FCA).
However, there are now doubts due to how legislation "could trigger the withdrawal of interest-free BNPL products, with ministers concerned about the impact of such a move during Britain's cost-of-living crisis", Sky News has reported.
In total, well over £10bn has been lent to consumers by BNPL companies in the last three years.
How did Martin Lewis respond to the BNPL plans?
Martin Lewis expressed concern about the potential for the Government to shelve plans to not regulate BNPL.
On his Twitter account he posted in response to the Sky News article: "Pls DON'T let this be true. It reports @hmtreasury plans to shelve much needed, called for & worked on plans (by @WhichUK, @TheFCA, @CitizensAdvice & til now govt itself) to regulate Buy Now Pay Later.
"Why'd it not regulate the UKs fasted growing form of debt, with billions lent? Yes, BNPL used right can help people borrow interest free to spread necessary costs, but it's still a debt. Protection's needed for when it's not right."
Pls DON'T let this be true. It reports @hmtreasury plans to shelve much needed, called for & worked on plans (by @WhichUK, @TheFCA, @CitizensAdvice & til now govt itself) to regulate Buy Now Pay Later
— Martin Lewis (@MartinSLewis) July 17, 2023
Why'd it not regulate the UKs fasted growing form of debt, with billions lent?…
Lewis also made a point that fairness rules apply to all other forms of debt and that the firms offering BNPL need to be "honest that this is borrowing not market it as a lifestyle choice".
He added: "Clearly amidst a cost of living crisis, when many are desperate and living on deficit budgets - all forms of major consumer debt need the protections embedded which regulation gives.
"I'd urge @Jeremy_Hunt to continue with the plans, which we were promised years ago, and have huge support amongst consumer groups (and some BNPL firms) and ensure it's fully regulated like the debt it is."
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