![]() The CFPB’s inquiry comes after a hearing held by the U.S. The agency is also evaluating what consumer protection laws apply to the budding fintech products, as well as assessing the impacts of the data-harvesting practices the BNPL industry is using.Ĭonsumer advocates have long warned about the financial dangers these companies may pose to shoppers, and now the government is weighing in. ![]() The CFPB says it’s concerned about consumers accumulating too much debt using BNPL products. Hawaii Alaska Florida South Carolina Georgia Alabama North Carolina Tennessee RI Rhode Island CT Connecticut MA Massachusetts Maine NH New Hampshire VT Vermont New York NJ New Jersey DE Delaware MD Maryland West Virginia Ohio Michigan Arizona Nevada Utah Colorado New Mexico South Dakota Iowa Indiana Illinois Minnesota Wisconsin Missouri Louisiana Virginia DC Washington DC Idaho California North Dakota Washington Oregon Montana Wyoming Nebraska Kansas Oklahoma Pennsylvania Kentucky Mississippi Arkansas Texas Repair My Credit Buy now, pay later: fees and risks The catch? Late fees and/or interest, depending on the specific payment plan. Through installment plans, the companies allow you to either pay the entire total at a later date or break your payments up into tinier chunks. They usually appear on an online retailer's check-out page, where Affirm, Afterpay or another fintech company entice you to make a purchase now, even if you don’t have the funds. If you’ve shopped online in the past few years, you’ve almost certainly come across one of these companies. “We have ordered Affirm, Afterpay, Klarna, PayPal, and Zip to submit information so that we can report to the public about industry practices and risks.” “Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra in the announcement. The Consumer Financial Protection Bureau (CFPB) announced Thursday that it’s opening the inquiry to determine the benefits and risks of the loan-like programs, which have become increasingly popular alternatives to payments made by debit or credit cards. A federal consumer watchdog just launched a probe into five major companies offering “buy now, pay later” (BNPL) services.
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