BNPL issue

moneymonkey26

A family member took out a bnpl agreement to get some electrical work done to their new house, fuse box and rewire work. The work was carried out starting on the 14th and finished on the 15th. They've now been told that due to the changes that came in on the 15th they can't honor the payment plan and it has to be paid in full. Where do they stand with this. Work was done by a well known national company.

Aylesbury_Duck

Which company? It won't cause any problems naming them.

Grumpy_chap

A family member took out a bnpl agreement to get some electrical work done to their new house, fuse box and rewire work. The work was carried out starting on the 14th and finished on the 15th. They've now been told that due to the changes that came in on the 15th they can't honor the payment plan and it has to be paid in full. Where do they stand with this. Work was done by a well known national company.

So, the work has been done and the customer has not paid.

The customer had planned to pay in instalments, which the company has now said is not possible and they want payment in full.

The customer cannot afford to pay in full (so I assume).

I would suggest that the customer makes the payments in line with the original payment plan which they could afford and maintains those payments until the original price has been covered.

The supplier might grumble, or might even try some legal / recovery action but they probably won't bother if they can see the payments are coming in to some schedule or another.

flaneurs_lobster

Was there a written BNPL agreement signed by both parties prior to 15 July?

If so then that continues to be valid, and the family member should make the payments in the amounts and on the dates agreed.

kaMelo

Assuming this is to do with BNPL becoming a regulated activity on the 15th July.

Interesting to read on the FCA website:

If you want to start providing DPC agreements, you will need to be authorised by us as a consumer credit lender before you can do so. However, you can continue to service any DPC agreements that were taken out before regulation day, as those agreements remain exempt.

I guess the question is, does the agreement count as being exempt as the agreement was made prior to the 15th of July, just no money had changed hands.

Ergates

If it was a formal agreement - i.e. confirmed in writing in some form of offer and acceptance and an agreement on terms - then I'd agree it should count as being formed prior to the 15th.

If not (e.g. it was just a conversation about payment options) then probably not.

OP says:

A family member took out a bnpl agreement

which sounds more like the former.

Maybe the company just need to be shown the info on the FCA website that the agreement formed before the 15th is still OK. I can understand why they'd not want to accidentally breach FCA regs on lending - that could end quite badly for them.

A_Geordie

The new BNPL rules applies to third parties largely such as a Klarna, PayPal etc. Companies can still offer instalment credit under the exemption rule so long as the instalments are 12 or fewer and the repayment period is no more than 12 months, it's for a fixed amount and there's no additional charges e.g. interest free and no other ancillary fees or charges.

If that's what the family member agreed to, it's perfectly legal.