January 25, 2022

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USA, a government agency, now opens an inquiry into buy, then pay companies

(Teleforza) – The U.S. government agency that handles the Consumer Protection Bureau (CFPB), banks, credit institutions, and other financial institutions. The investigation was launched in the field of “Buy Now, Pay Later”. It is a fast growing market that translates to “buy now and pay later” and offers short-term financing so that consumers can make purchases by paying in installments. One company in the industry, Swedish Klarna, is the highest rated Fintech startup in Europe.

CFPB is Issued a series of orders to five companies Providers of “Buy Now, Pay Later” services Gather information The risks and rewards of these fast-growing loans. The companies involved are Affirm, Afterpay, Klarna, PayPal and Zip. CFPB is already concerned about debt accumulation, regulatory arbitration and data collection in a rapidly changing consumer credit market with technology.

“Buy Now, Pay Later is a newer version of the old Levy plan, but with modern and faster twists The consumer gets the goods immediately, but he gets the credit immediately – CFPB Director, Rohit Chopra said, “We have ordered the shipment of Affirm, Afterpay, Klarna, PayPal and Zip so that we can inform the public about the department’s practices and risks.”

According to the CFPB, online stores now accept purchases, then pay for programs and are willing to pay companies 3% to 6% of the purchase price, similar to credit card transfer fees in general. With this buying method consumers often buy more and spend more. However, it is worrying that the application process is too fast as it does not take into account the consumer risks. For example, it is true that commissions are often non-existent, but they do work when making late payments.

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