Providence’s Jeff Ankrom authored an article for Law360 analyzing legal pitfalls for FinTech companies offering buy-now, pay-later options to consumers, who may not understand the details of their payment obligation. Ankrom writes, “Creditors offering buy-now, pay-later financing must make sure that the merchant informs the consumer that they are taking out a loan and who the creditor is.” He adds the Truth in Lending Act requires a creditor to disclose the terms of the financing.
Because store clerks are essentially positioned as loan officers in a buy-now, pay-later point of sale transaction, FinTech companies should also ensure merchants are educated in consumer protection laws, including the importance of providing mandatory disclosures, Ankrom observes.
“When developing a buy-now, pay-later financial technology, a creditor should build systems that avoid fraud, ensure accurate communication with the consumer and monitor for compliance with consumer lending laws,” he writes.
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