The crucial correction: Section 75 is not automatically available for every Klarna or Clearpay transaction. In 2026, some BNPL products are regulated by the FCA, and the legal protection depends on the structure of the credit agreement.
Section 75 has specific conditions
Section 75 can make a credit-card company or creditor jointly liable with the supplier for certain breaches or misrepresentations where the cash price of the item is more than £100 and not more than £30,000, subject to the statutory requirements.
It is therefore not a universal “BNPL protection”. The credit agreement must fall within the relevant statutory structure and the transaction must meet the applicable conditions.
What changed on 15 July 2026?
The FCA began regulating Deferred Payment Credit (DPC), a category of interest-free BNPL credit repayable in 12 or fewer instalments over 12 months or less. Third-party DPC lenders are now subject to FCA regulation, with some firms operating under temporary permission arrangements.
The FCA specifically says Section 75 is available for DPC and that consumers may be able to obtain a refund from the lender when something goes wrong with goods bought using DPC.
Do not assume every Klarna product is identical
Klarna offers more than one payment product, and the legal treatment can differ according to the exact credit structure. The same is true for Clearpay and other BNPL providers.
Check the agreement, the lender, the purchase price, whether the merchant and lender are separate, and the type of credit you actually used.
What problems can Section 75 cover?
Section 75 can be relevant where the supplier has breached the contract or made a misrepresentation, such as non-delivery, serious failure to provide the contracted goods or another qualifying breach. Fraudulent or non-delivery scenarios therefore require an analysis of the underlying supplier relationship rather than simply the word “fraud”.
What about small purchases?
If the cash price is £100 or less, Section 75 does not apply. You may still have other protections, including chargeback rules, the Consumer Rights Act, FCA complaint protections where the lender is regulated, or other contractual remedies.
How to make the complaint
- Identify the exact lender and BNPL product.
- Save the purchase agreement and order details.
- State the problem with the supplier.
- Explain the contractual breach or misrepresentation.
- Ask the lender to consider the Section 75 position.
- Keep the lender's response and complaint reference.
For FCA-regulated BNPL lenders, consumers can complain to the lender and, if unresolved, take the complaint to the Financial Ombudsman Service.
What this means practically
- Do not assume all Klarna or Clearpay products qualify automatically.
- Check the exact credit structure and purchase price.
- From 15 July 2026, qualifying DPC lenders are within FCA regulation.
- Section 75 is distinct from ordinary chargeback.
- Keep the supplier complaint and lender complaint in the same evidence file.
Sources
- FCA — Buy Now Pay Later, updated August 6, 2026: fca.org.uk
- FCA — Regulation of Deferred Payment Credit, July 15, 2026: fca.org.uk
- FCA — New protections for BNPL borrowers, February 11, 2026: fca.org.uk
- FCA — Fraudulent payments and Section 75: fca.org.uk
Related Kibbo Tools
- Chargeback Letter Generator — structure a Section 75 claim against the lender around the exact credit agreement.
- E-commerce Refund & Cancellation Tracker — track the purchase, delivery, supplier complaint, lender complaint, and resolution.