The ASA has published detailed guidance to retailers when advertising delayed payment services (Guidance), often called Buy Now Pay Later products (BNPL).
The Guidance can be found here but our top flags would be the following:
As an overarching principle, consumers should be given enough information to ensure that they understand what the service is, how they are expected to settle their balance, and what penalties or fees they may be subject to. Additionally, any significant / unusual / onerous conditions should be clearly communicated.
Generally, marketers should also ensure that:
- 1. it is clear to consumers that BNPL is a form of debt;
- 2. unless it can be demonstrated that the service will never affect a consumer's credit score, an ad should not imply that this is the case;
- 3. they do not imply that BNPL services are suitable for all consumers or a risk-free way of obtaining credit;
- 4. when BNPL services are called 'free' the rules in relation to price statements will apply in full and marketers are then obliged to make clear to consumers whether any subsequent fees are chargeable;
- 5. where the marketing is general in nature, a link to comprehensive online information that covers "the nature of the contract being offered, any limitation, expense, penalty or charge and the terms of withdrawal" should be provided. Where the advertising refers to specific products (e.g. when BNPL is offered during checkout) then this information should be included in the ad itself;
- 6. when BNPL services are being advertised to consumers at the point of checkout, care should be taken to ensure that the nature of BNPL services as a payment option is made explicitly clear to consumers and, where relevant, highlight that standard forms of payment are available. Full terms and conditions (including any arrangements or consequences for late or missed payments) will need to be easily accessible by the consumer both prior to checkout and at the time of checkout; and,
- 7. any particularly significant conditions or qualifications (including fees, penalties and payment schedules) should be made clear as part of the checkout process (not just through a link to terms).
How has the ASA approached delayed payment ads?
If you would like to understand more about how the ASA has approached BNPL ads in the past, the issues were considered in an ASA ruling in respect of Klarna (not upheld) which you can read in full here.
And remember…FCA considerations
Finally, don't forget: providers of regulated BNPL products/alongside retailers need to ensure that any material which advertises a regulated product complies with all the rules and requirements set down in the Consumer Credit Sourcebook in the FCA Handbook, such as those in relation to financial promotions.