Phoenix, Arizona - Attorney General Mark Brnovich wants Arizona consumers to make informed decisions about the use of Buy Now Pay Later (BNPL) products.

BNPL products are becoming an increasingly popular way for consumers to purchase goods or services now and pay over time through installment payments.  BNPL consumers may benefit from increased purchasing power and paying over time, even those with less-than-perfect credit histories. 

BNPL consumers may, however, easily spend more than they can afford and rack up multiple BNPL purchases with varying payment schedules and payment terms. They also may face unexpected fees if they miss payments.

Merchants make BNPL offers available at the point of sale as an option to pay for merchandise on the check out screen.  Consumers who opt to pay with BNPL are redirected to a BNPL provider, which shows a timeline for installment payments.  For example, an upfront payment and four payments at two-week intervals.  The consumer confirms basic information such as name, billing address, telephone number, and date of birth.  Once approved, the consumer agrees to BNPL terms and conditions, presented digitally, and provides a payment account that the provider can charge or debit in installments. 

BNPL providers charge the merchant a percentage of the purchase price, similar to the fees charged to merchants when consumers use a credit card to make a purchase.

Arizonans should keep the following tips in mind when considering whether to use BNPL services:

  • While many BNPL options are interest free, consumers may face late fees, fees for failed payments, payment rescheduling fees, account reactivation fees or other fees that may not be readily apparent.
  • Consumers may find it difficult to manage their BNPL purchases due to the lack of consolidated account statements, varying repayment schedules, late fees and the consequences of default. 
  • Consumers may be charged overdraft fees when BNPL payments are automatically withdrawn from bank accounts. 
  • BNPL providers may harvest data, as they have access to the purchase and payment histories of consumers, and may use the data for targeted offers or advertisements.
  • BNPL services may raise complications with typical customer service problems, for example, obtaining a refund if cancelling or returning purchases.  Your repayment agreement may require you to continue to make payments until your cancellation or return is processed. 
  • BNPL may result in debt collection, which may hurt the credit scores of consumers who fail to pay on time. 

If you believe you have been the victim of consumer fraud, you can file a consumer complaint by visiting the Attorney General’s website.  If you need a complaint form sent to you, you can contact the Attorney General's Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the Phoenix and Tucson metro areas at (800) 352-8431.