US consumer protection agency to probe

The US Consumer Financial Protection Bureau announced Thursday it has opened an investigation into the risks and benefits of “buy now, pay later” payment options, which have become particularly popular during the pandemic.

The agency said it is “concerned” about the potential accumulation of debt, compliance with consumer protection laws and the use of data collected by companies offering such payment schemes. The CFPB has requested more information from five such companies: Affirm, Afterpay, Klarna, PayPal and Zip.

The companies typically let customers pay for a purchase in four installments with no fees or interest and no paperwork. While it has long been possible in the United States to pay for a product in installments, the new payment schemes add “modern, faster twists,” said agency director Rohit Chopra in a statement.