CFPB Avoids Fights Treating Buy Now, Pay Later Like Credit Cards

Existing consumer protection practices at the largest “buy now, pay later” companies are likely to preclude potential litigation over a new federal rule treating the companies like credit card issuers.

BNPL companies that offer short-term financing allowing customers to pay for products in equal installments over six weeks will explicitly be required to provide refunds for damaged or returned products, investigate disputes, and send out monthly statements to customers under a rule the Consumer Financial Protection Bureau released Wednesday.

But market leaders such as Affirm Holdings Inc., Klarna Bank AB, and Block Inc.'s Afterpay already provide customers with those features, ...