Over the summer, the UK government set out the first plans for new rules governing the fast-growing but controversial BNPL sector. However, while the legislation inches towards completion, the FCA has taken proactive steps to use existing powers to bring firms into line. In August, the regulator publicly warned against promoting unapproved BNPL products. Now, in a letter first reported by City AM, it has written to several providers and to retailer to follow up. The letter says that any communication or so-called explainers on BNPL products constitute "financial promotions" - meaning that they fall within the regulator’s jurisdiction. Promotions that are not "clear, fair and not misleading" could result in up to two years in prison. City AM quotes a source at one BNPL firm arguing that the FCA is using a "loophole" to regulate the sector. "The FCA appears to have taken the position that any information that explains how the product works is a financial promotion and therefore needs to go through a regulated sign-off process," says the source.