By Cora Lewis, APFILE – Consumer Financial Protection Bureau Director Rohit Chopra speaks from the South Court Auditorium on the White House complex in Washington, April 11, 2022. The Consumer Financial Protection Bureau says in a new rule that buy now, pay later lenders are basically credit card providers and must provide the same protections and rights that apply to those lenders.
as zero-interest, or low interest, and allow consumers to spread out payments for purchases over several weeks or months. They’re marketed as a way to buy expensive products and services over time, and the service is typically offered at checkout for online shopping. It’s often used for big-ticket items, like furniture, clothes and airline tickets., the CFPB found that more than 13% of buy now, pay later transactions involved a return or dispute, and, in 2021, people disputed or returned $1.
A spokesperson for Klarna said the company also already investigates consumer disputes and covers related refunds. The CFPB said that buy now, pay later lenders need to extend many of the same rights and protections as classic credit card providers. “Importantly, these cover dispute and refund rights,” the agency said.— Investigate disputes. Lenders must also pause payment requirements during the investigation and sometimes must issue credits.
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