PayPal, Affirm and Afterpay Ltd. are among several companies being scrutinized by U.S. regulators over their policies of letting consumers buy products now, while paying for them later.
In a Thursday statement, the Consumer Financial Protection Bureau said it’s demanding information from the firms because it’s concerned that borrowers are accumulating debt, companies might be engaging in regulatory arbitrage and consumers’ personal data could be misused. The regulator said it’s also seeking responses from Klarna Bank AB and Zip. “Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” CFPB Director Rohit Chopra said in the statement. The agency is requesting information so that it “can report to the public about industry practices and risks.” he added.