Burnley’s Dave Fishwick has called for regulation of money lending schemes where the “poor [seem to] end up paying more”.

Dave Fishwick, owner of Burnley Savings and Loans, appeared on Good Morning Britain to talk about buy now, pay later (BNPL) schemes, which allow customers to purchase goods or services and pay for them over time.

Some BNPL schemes offer interest-free payments for a set period of time. After that, interest charges and fees may apply.

Dave, whose real-life fight to set up a community bank inspired the Netflix film Bank of Dave, said it is these charges can land some users in financial trouble.

He says affordability checks and adherence to financial conduct authority (FCA) rules need to be introduced.

Dave said: “The BNPL industry needs regulating. People who use this system and pay it back [on time without a late fee] it is good for them but the poor end up paying more.

“The problem is, if you need the money in the first place what are the chances that you are going to be paying it off?

 

 

“What the scheme needs is the FCA regulating customers. By regulating these industries, customers then have somewhere to complain. We also need affordability checks.

 “When you buy with a credit card, normally you have joint liability with the credit card company.

“You have no protection with a BNPL scheme. We have been speaking to ministers and we really do need this regulating.”

There are reports of people using the BNPL scheme to pay for essentials, such as children’s food, and then getting stuck in a vicious cycle of debt when they are late with repayments.

The Government recently announced that shoppers are set to be protected by new rules for BNPL products.  

On October 17, it launched a consultation on proposals to fix this by bringing companies under the supervision of the FCA and applying the Consumer Credit Act, ensuring users receive clear information, avoid unaffordable borrowing, and have strong rights when issues arise. 

The rules are not set to take place until 2026. Until then the scheme may continue to negatively impact the nation's poorest, according to Dave.

He said: “The poor always seem to pay more. We have been looking into this for months and speaking to people and they just seem to end up with the tough end of the stick and end up having to pay more.

“It always affects the poor and vulnerable and that is what worries me. We need a net for people to fall on to bounce back in society and contribute to society.

“I spoke to a woman who borrowed £600 and it ended up being £6,000. She only borrowed it to buy things for her children. She was a nurse – it’s not just people on benefits borrowing.

“If you are in trouble you need to go to the lender and ask them to freeze the payments and extend the loan with smaller payments. Ask them to take a look and do anything they can.

“There is help out there, you just have to get online and make a phone call and really push.”

Economic secretary to the treasury, Tulip Siddiq, said: “Millions of people use BNPL to manage their finances, but the previous government’s dither and delay left them unprotected.     

“We promised to take action before the election and now we are delivering. Our approach will give shoppers access to the key protections provided by other forms of credit while providing the sector with the certainty it needs to innovate and grow.”