The U.S. Consumer Financial Protection Bureau says 'buy-now, pay-later' products could harm customers and plans to regulate companies like Klarna and Affirm Holdings
The CFPB in its report, however, said it was concerned their products could pose risks to consumers, highlighting a lack of standardized disclosures across the five companies surveyed and the potential for consumers to become overextended.
In a statement, a spokesperson for Affirm said its top priority is "empowering consumers by providing a safe, honest and responsible way to pay over time with no late or hidden fees." A spokesperson for Klarna said the company "is committed to financial wellbeing and protecting consumers through industry innovation and proportionate regulation."
Penny Lee, CEO of the Financial Technology Association, a trade group that represents Afterpay, Klarna, PayPal and Zip, said in a statement that the report made clear that BNPL is a competitive alternative to high-interest credit products.
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