The Consumer Financial Protection Bureau (CFPB) is probing a lending business owned by eBay Inc. that has been criticized for allegedly imposing excessive finance charges, the Wall Street Journal reported today. The online marketplace disclosed in a regulatory filing on Friday that it received a civil subpoena in August from the U.S. consumer finance watchdog about a financing service known as "Bill Me Later." The service, acquired by eBay's PayPal division in 2008, allows consumers to borrow money to finance purchases at dozens of online retailers, including Wal-Mart Stores Inc., Apple Inc., and several airlines. Customers generally don't have to pay interest on the loan as long as it's paid in full at the end of a six-month promotional period. If it isn't repaid within that period, customers are charged interest accrued over the entire life of the loan. The CFPB subpoena comes as part of the agency's scrutiny of so-called "deferred interest" financing, particularly credit cards issued by retailers. In a report issued earlier this month, the CFPB raised concerns about such financing, saying that it "can sometimes be more expensive" than putting the balance on an existing credit card, because the interest rate is often much higher.
