BOSTON, Mass. (WWLP) – Attorneys General from 21 states, including Massachusetts, are asking the Consumer Financial Protection Bureau (CFPB) to take a closer look at loan practices that may be in violation of state and federal consumer laws.
Read the letter from the Attorneys General to the CFPB.
The coalition of attorneys general are concerned about “buy-now-pay-later” (BNPL) lending practices that may cause consumers to be stuck in rotating debt. These are installment loans that offer consumers the option to purchase products or services on-line with little or no money down and then pay off the loan in short payments. While most BNPL loans don’t charge interest, they do charge a fee for late payments which can cause a significant increase the amount of the loan. They report late or missed payments to credit bureaus, impacting credit ratings. The lenders also do not consider a consumer’s ability to pay during the application process.
And, unlike a credit card purchase, these loans don’t offer dispute protections if the purchased item is lost, stolen or faulty, or you are a victim of a scam.
“Buy-now-pay-later lenders can make promises that sound too good to be true, and often, they are, resulting in borrowers paying much more money in deals they can’t get out of,” AG Healey said. “I am joining my colleagues in calling on the CFPB to examine the practices…
