US consumer watchdog asks BNPL companies for data on services, shares tumble

• CFPB is concerned about the impact of BNPL in the accumulation of consumer debt

• The UK government is also planning to introduce regulations for the BNPL sector

U.S. consumer watchdog on Thursday asked five “buy-now, pay-later” companies to provide information on their financing business practices amid concerns that these services are putting consumers at risk.

The Consumer Financial Protection Bureau (CFPB) started an inquiry on Affirm Holdings, Afterpay Ltd, Klarna, PayPal Holdings Inc, and Zip Co in the wake of a boom in Buy-Now, Pay-Later (BNPL) financing services, which allow consumers to split purchase payments into monthly installments without any interest — though some do charge hefty late payment fees.