Advertising for buy now, pay later is virtually everywhere and millions of Americans have used the service.
Recently, the Consumer Financial Protection Bureau enacted new rules to protect consumers.
KRPS’s Fred Fletcher-Fierro has more.
Buy now, pay later has become more widespread among Americans. According to Bankrate.com, 39% of U.S. adults say they have used at least one buy now, pay later service.
PayPal Pay, Affirm, Afterpay, and Klarna are among the most widely used services. Buy Now, pay later is another known as a loan. Some loans may have zero percent interest, all the way up to 30 percent, and before the changes by the CPFB American consumers had no to no recourse if something went sideways with a lender.
Nearly 16,000 consumers filed complaints with BBB in 2023 about payment processing services, which include installment payment financing companies. Regional Director of the Better Business Bureau in Springfield, Missouri Pamela Hernandez explains one of the main sources of complaints.
“And a lot of those complaints were related to billing errors because they don’t get a statement, they can’t see anything, and a failure to issue refunds and being charged for lost or undelivered items.”
The new protections will help millennials the most. According to a recent survey, they are the most likely to have used buy now, pay later. 55% of millennials reported using BNPL — the largest percentage across generations. The BBB highly suggests reading the fine print. Understand what the company is financing and how long the payments will last.
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