Afterpay Hides Risk of Bank Overdraft Fees, Consumer Alleges (1)

Afterpay US Inc. was hit with a proposed class suit in federal court in Maine alleging it fails to warn users that its buy-now-pay-later service puts them at risk of hefty bank fees if they have insufficient funds in linked accounts when payments are automatically withdrawn.

The suit, filed Wednesday in the U.S. District Court for the District of Maine, follows similar litigation against PayPal and GasBuddy by consumers who say those services hid the risk they could incur charges from their banks.

Afterpay allows users to break payments into four installments and pay off a purchase over six weeks, ...