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Affirm “Buy Now, Pay Later” Misrepresentations New York Class Action

Affirm Holdings, Inc. offers consumers “buy now, pay later” (BNPL) plans through partnerships with brick-and-mortar stores. Under these Affirm plans, customers buy merchandise, then make multiple payments until they have paid off the item. But these kinds of payment plans have disadvantages to customers as compared to credit cards, including an inability to return merchandise, difficulty of keeping track of payments, and high interest rates.

The class for this action is all citizens of New York who used Affirm in New York during the applicable statute of limitations.

The complaint makes a number of allegations against Affirm payment plans. First, it says, “The ease with which consumers can access BNPL providers like Affirm encourages” consumers to spend more on items which they otherwise might not be able to afford. BNPL plans, the complaint claims, are often used on discretionary items like clothing and jewelry.

It quotes a survey saying that over half of shoppers who use BNPL “increased their spending between 10 percent to over 40 percent when they use these plans compared with using a credit card.”

Also, it claims BNPL payments are harder to keep track of, so that consumes are more likely to fail to make payments.

If customers return items, credit cards allow them to get refunds or dispute charges; but a BNPL company may not.

Furthermore, the complaint alleges that “the interest rates charged through Affirm exceed [those of] most credit cards, without any of the protections of this regulated form of payment.” Also, when users finance purchases, they cannot pay them off early; they are required to pay interest over the full term of the loan.

The complaint alleges, “A survey by Credit Karma and Qualtrics found that 40% of Americans used BNPL services and 38% of this total have quickly fallen behind on their payments.”

In sum, the complaint claims, “Affirm’s use … has resulted in increased debt, higher interest, less transparency and reduced consumer protections.”

What laws does this break? The complaint alleges, first of all, that Affirm violates New York’s General Business Law, a consumer protection statute: Affirm’s “false and deception representations and omissions are material in that they are likely to influence consumer purchasing decisions.” Affirm, it says, “misrepresented the Product through statements, omissions, ambiguities, half-truths and/or actions.” Consumers “would not have used the Product or paid as much if the true facts had been known…”

Following on this, the complaint alleges negligent misrepresentation, claiming that Affirm did not truthfully represent the product: “The representations took advantage of consumers’ cognitive shortcuts made at the point-of-sale and their trust in” Affirm.

Finally, it alleges unjust enrichment, “because the Product was not as represented and expected…”

Article Type: Lawsuit
Topic: Loans

Most Recent Case Event

Affirm “Buy Now, Pay Later” Misrepresentations New York Complaint

June 14, 2021

Affirm Holdings, Inc. offers consumers “buy now, pay later” (BNPL) plans through partnerships with brick-and-mortar stores. Under these Affirm plans, customers buy merchandise, then make multiple payments until they have paid off the item. But these kinds of payment plans have disadvantages to customers as compared to credit cards, including an inability to return merchandise, difficulty of keeping track of payments, and high interest rates.

Affirm “Buy Now, Pay Later” Misrepresentations New York Complaint

Case Event History

Affirm “Buy Now, Pay Later” Misrepresentations New York Complaint

June 14, 2021

Affirm Holdings, Inc. offers consumers “buy now, pay later” (BNPL) plans through partnerships with brick-and-mortar stores. Under these Affirm plans, customers buy merchandise, then make multiple payments until they have paid off the item. But these kinds of payment plans have disadvantages to customers as compared to credit cards, including an inability to return merchandise, difficulty of keeping track of payments, and high interest rates.

Affirm “Buy Now, Pay Later” Misrepresentations New York Complaint
Tags: Deceptive Misrepresentation, Negligent Misrepresentation