The Consumer Financial Protection Bureau issued an interpretive rule confirming that Buy Now, Pay Later (BNPL) lenders are credit card providers while setting expectations for disclosures, refunds and handling disputes.
The CFPB, which began an inquiry into BNPL practices in 2021, said it continues to field consumer complaints tied to refunds and disputed transactions.
“When consumers check out and choose Buy Now, Pay Later, they don’t know if they will get a refund if they return their product or whether the lender will help them if they didn’t get what was promised,” CFPB Director Rohit Chopra said in a press release.
The CFPB determined that more than 13% of BNPL transactions involved a return or dispute.
The guidance does not require BNPL providers to assess a borrower’s ability to repay. BNPL providers are still not required to share data with credit bureaus.