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Buy now, pay later companies must adhere to credit card standards, consumer agency says

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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.

FILE - Consumer Financial Protection Bureau Director Rohit Chopra speaks from the South Court Auditorium on the White House complex in Washington, April 11, 2022. – Buy now, pay later companies must provide consumers with the same legal rights and protections as credit card lenders do, the Consumer Financial Protection Bureau said Wednesday in a new rule.

“We are encouraged that the CFPB is promoting consistent industry standards, many of which already reflect how Affirm operates, to provide greater choice and transparency for consumers,” a company spokesperson said in a statement. Affirm currently offers “dispute and error resolution assistance,” the spokesman added.

While some in the industry have voluntarily chosen to operate at the standard now mandated by the CFPB's new rule, there remain significant differences between credit card lending and buy now, pay later loans. For instance, buy now, pay later lenders do not all report their loans to the three major credit bureaus. Some analysts have said thisWHAT RIGHTS DO CONSUMERS HAVE?

 

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