Buy Now, Pay Later (BNPL) lenders must follow some credit card consumer protection rules, the Consumer Financial Protection Bureau said Wednesday, as the agency attempts to more strongly oversee the sector.
Companies such as Klarna, Afterpay and Affirm partner with retailers to finance customer purchasers. Although the sector is a major source of credit, there’s no federal oversight framework.
An interpretive rule released by CFPB on Wednesday said that BNPL lenders are now required to comply with certain rules from the Truth in Lending Act, including refunding returned products, providing periodic billing statements and investigating customer disputes.
“Regardless of whether a shopper swipes a credit card or uses Buy Now, Pay Later, they are entitled to important consumer protections under longstanding laws and regulations already on the books,” said CFPB Director Rohit Chopra.
