The Consumer Financial Protection Bureau (CFPB) issued a call for comments on the agency’s inquiry into the Buy Now Pay Later, or BNPL, industry. BNPL is a rapidly expanding industry offering consumers the option to pay for purchases in installments, sometimes interest-free.

While the interest-free model of BNPL credit products can be an affordable alternative to other short-term credit options, the payment structure of the six-week, pay-in-four plans and lack of clarity around these products raise serious consumer protection concerns. Woodstock’s comment focuses on a few key concerns:

  • Pay-in-four over six weeks plans have biweekly payments, which is an unfamiliar and sometimes inflexible payment schedule for a consumer compared to other regular bills.
  • Consumers can have multiple BNPL plans at the same time, which can quickly become chaotic and unmanageable and can have negative consequences for a consumer’s finances overall.
  • There is not enough data on these products or how they are being used.
  • Business practices are inconsistent across providers and across products, especially in regards to credit reporting, underwriting, and communication with merchants to resolve consumer disputes or order cancellations and returns.

You can read our full comment letter here: