The U.S. Consumer Financial Protection Bureau (CFPB) yesterday asked five "buy-now, pay-later" companies for information on their business practices, amid concerns that the financing products are putting consumers at risk, Reuters reported. The agency issued the order to Affirm Holdings, Afterpay Ltd, Klarna, PayPal and Zip Co in the wake of a boom in "buy-now, pay-later" services, which allow consumers to split purchase payments into installments, driven in part by online shopping growth during the coronavirus pandemic. The CFPB said it is concerned about "accumulating debt, regulatory arbitrage, and data harvesting" and is seeking data on the risks and benefits of the products. "The consumer gets the product immediately but gets the debt immediately too," CFPB Director Rohit Chopra said in a statement. A survey in September by personal finance company Credit Karma found that one-third of U.S. consumers who used "buy-now, pay-later" services have fallen behind on one or more payments, and 72% of those said their credit scores declined.
