By Katherine Hamilton
Attorneys general from seven states are launching an inquiry into buy now, pay later lenders including Affirm, Klarna and PayPal.
The attorneys general sent a letter Monday to the six largest buy now, pay later providers seeking information about their pricing and repayment structures, as well as consumer contracts, agreements and disclosures. Block's company Afterpay, Sezzle and Zip also received the letter.
The inquiry aims to determine whether the companies are complying with consumer protection laws and if their products may be placing consumers at financial risk. Attorneys general have previously raised concerns that buy now, pay later companies may not provide the same consumer protections as other credit products.
They are asking companies to describe each of their loan products, including pricing and repayment, and their process for addressing consumers' disputes. They are also seeking information about customer service, procedures to determine consumers' ability to take on a loan and procedures around credit reporting.
"We are also concerned that BNPL providers may not adequately assess borrowers' capacity to repay their loans," the letter said.
The letter was from officials in California, Colorado, Connecticut, Illinois, Minnesota, North Carolina and Wisconsin.
Former President Biden's administration issued a rule requiring the companies to adhere to the same consumer protections as other lenders. That rule was abandoned by President Trump's administration.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
December 01, 2025 15:35 ET (20:35 GMT)
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