Buy now Pay later
In a recent article, the US government announced plans to regulate ‘buy now pay later loan companies. The Federal Trade Commission (FTC) has claimed that these companies are preying on consumers by misleading them about the costs and risks of their loans. They have also claimed that these companies use deceptive marketing tactics, such as false promises of low-interest rates and long repayment periods.
The proposed regulation would require these companies to be registered with the government and have a physical presence in the US. The bill also includes provisions to prevent these companies from collecting fees on loans they have not made. If you are interested in a buy now pay later loan, make sure to research the company’s reputation before signing up.
When looking for a loan, consumers will have to provide their bank account information. This information will be used to make sure the person who is borrowing the money can afford to pay it back. If they cannot afford to pay back the loan, their bank account will be frozen and they will not be able to access their money.
The US government is planning to regulate ‘buy now pay later loan companies after a study found that people are taking out these loans and then not paying them back. The study, which was conducted by the Consumer Financial Protection Bureau, found that the companies are charging interest rates up to 700% and some people are not even able to pay off their loans. This is causing a lot of debt and financial problems for people who took out these loans. The US government is planning to bring these companies under more regulation so that they are forced to cap their interest rates and make sure that people can pay off their loans.
According to a CFPB inquiry from the previous year Affirm Holdings, Block’s Afterpay, Klarna, PayPal, and Australia’s Zip made b totaling $24.2 billion. The CFPB, however, asserts in the study that they are worried that these products could endanger customers. The bureau draws attention to the five companies’ lack of consistent information-sharing systems.