Buy now pay later agreements come into FOS scope

Buy now pay later agreements taken out on or after 15 July 2026 are now within the scope of the Financial Ombudsman Service (FOS), according to guidance published by Business Debtline and National Debtline¹. The change means complaints about these agreements can be escalated to the ombudsman once a lender's own complaints procedure has been exhausted².

The FOS can help with most complaints about UK consumer credit products and services, including banking, credit cards and store cards, loans and hire purchase, payday loans and pawn broking, and debt collectors collecting debt owed under a credit agreement². Buy now pay later agreements taken out on or after 15 July 2026 are listed alongside these¹.

The ombudsman does not have the power to fine or punish businesses, but it can help settle disputes between businesses and consumers, and it can award compensation¹. It costs nothing to complain to the FOS¹. Before the FOS will look at a complaint, the borrower must first complain to the lender, which by law has eight weeks to respond². If the borrower is not happy with the outcome, or the lender does not respond at all, the complaint can go to the FOS². There is a six month deadline from the date of the lender's final response to take a complaint to the FOS¹.

If the borrower accepts the FOS decision, it is binding on the lender¹. If the borrower does not accept it, the lender does not have to act on any suggestions by the FOS to put things right, and there is no right of appeal, although the borrower can still take the lender to court³.

The FOS can also consider complaints from micro-enterprises and small and medium-sized enterprises (SMEs)¹. A micro-enterprise is defined as a business with fewer than ten employees and an annual turnover of no more than €2 million; an SME is a business that is not a micro-enterprise but has fewer than 50 employees and an annual turnover below £6.5 million¹.

Separately, the unfair relationship rules under the Consumer Credit Act 2006 apply to new agreements from 6 April 2007 and all existing agreements from 6 April 2008¹. Only a court can decide whether an agreement is unfair under those rules, and there is a fee to pay when putting in a direct claim³. The rules cannot usually be used for regulated mortgage contracts, but can be used for some secured loans taken out before 21 March 2016².

The Financial Conduct Authority cannot deal with individual complaints, but as regulator it can take action against companies¹. Companies carrying out consumer credit activities must have permission or authorisation from the FCA and must have a formal complaints procedure¹.

Why it matters for households

Anyone who takes out a buy now pay later agreement on or after 15 July 2026 has a route to the Financial Ombudsman Service that did not exist for earlier agreements. Complaints about agreements taken out before that date are not covered by this change, so the date the agreement was signed determines whether the ombudsman can look at a dispute¹.

For a complaint to reach the FOS, the lender must first be given the chance to resolve it, and the lender has eight weeks to respond². The six month window to escalate runs from the lender's final response, so missing it may mean the ombudsman cannot help¹. Complaining to the FOS is free, and the service can be contacted on 0800 023 4567 or 0300 123 9123³.

Where a complaint is upheld, the FOS can tell the lender to put things right, which may include paying compensation¹. Accepting a decision makes it binding on the lender¹. Borrowers who do not accept it keep the option of court action, but the lender is not bound by the ombudsman's suggestions in that case³.

What happens next

The 15 July 2026 date is the point from which buy now pay later agreements fall within FOS scope¹. No further implementation dates are given in the guidance. The deferred payment credit rules set the wider framework for buy now pay later regulation, and the FCA remains the regulator for consumer credit firms¹.