"Buy now, pay later" Review of risks and remedies

Author

Clarisse N'kaa

Organization

Option consommateurs

Published

2023

Summary

A new form of financing, known as “buy now, pay later”(or “BNPL”) is steadily making its presence known in the Canadian consumer landscape. Unlike the model offered by traditional financing companies, BNPL permits consumers to obtain financing for small purchases. The emergence of this new formula, offered by “fintechs” such as Sezzle, Affirm, Afterpay and Klarna, raises numerous questions, particularly as they relate to consumer protection. This report details the findings of a study by Option consommateurs in which the risks associated with credit and indebtedness, recourse in cases of dispute, and consumer literacy on this form of lending were examined.

The analysis revealed that, in general, there were discrepancies between credit/indebtedness regulations and agreement provisions, which had an impact on recourse/dispute resolution and consumer literacy. The report also identifies opportunities for further research into this topic, including areas where intervention could benefit consumers, and includes a variety of recommendations for federal and provincial governments, businesses offering BNPL plans and consumers.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

Contact information

Source: Consumer Policy Research Database