No 18, no Klarna: new law protects young people from debt
New legislation in the Netherlands effective November 20 mandates strict age verification and creditworthiness checks for Buy Now Pay Later services. These measures aim to protect young people from accumulating unsustainable debts by ensuring they are financially capable of meeting their payment obligations.
Starting November 20, a new law in the Netherlands will impose stricter regulations on Buy Now Pay Later (BNPL) services to prevent youth debt. Companies must now implement mandatory age verification, such as iDIN, and perform creditworthiness checks for purchases exceeding 100 euros. The legislation aims to address the significant number of young people facing payment reminders and late fees. By forcing companies to verify the financial status of consumers and warn that borrowing money incurs costs, authorities hope to curb the accumulation of debt among vulnerable users.
The Netherlands Authority for the Financial Markets will oversee compliance, ensuring that providers act responsibly. While the new rules require checks through the Bureau Credit Registration, some experts remain cautious, noting that small accumulated debts or arrears with utilities may still go undetected. Additionally, the legislation mandates that companies offer assistance to customers facing payment difficulties and limits late payment fees to 60 euros. These measures collectively strive to ensure that young consumers are protected from the long-term consequences of impulsive credit-based spending.
Based on reporting by nu. Translated and condensed by LocalHeadlines.
