Regulators Open Probe Into Red Hot 'Buy Now, Pay Later' Industry (cnn.com) 65
Regulators in Washington may crack down on the industry behind "buy now, pay later," the increasingly popular method for consumers to purchase things online. From a report: The Consumer Financial Protection Bureau said Thursday that it is looking to "collect information on the risks and benefits of these fast-growing loans" from five leading BNPL companies: Affirm; Australia's Afterpay, which is getting bought by Square owner Block; PayPal; privately held Swedish fintech Klarna; and Zip, another BNPL firm headquartered in Australia. "Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too," said CFPB Director Rohit Chopra in a statement Thursday. The CFPB said it was specifically worried about how quickly consumers can accumulate debt using BNPL services and also about how the BNPL companies may harvest data about their customers. It added that it is working with international partners in Australia, Sweden, Germany and the United Kingdom on the inquiry.
Good. (Score:4, Interesting)
Fuck these cancerous twats. We have enough debt slavery already.
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What's your solution? And do we en-masse take everything back from people that took the money upfront but don't like the terms?
I wouldn't sign up for these services either but I know my wife lives by them.
In a more responsible world, we would tell people they can't buy it if they can't afford it but that is not the world we live in.
I live comfortably with a mid to high 5 digit salary, but I understand people getting these loans and if the people are responsible, they are able to pay them back.
Re: Good. (Score:3)
Solution is easy. Want something you can't pay for right now? Save. It's basic shit you should be teaching your 5 year old. Buy now pay later should at the least be heavily regulated and if not outlawed. It's just making poor people poorer thinking they can afford material, unneeded shit when they can't. Toys, games, electronics, jewelry etc are not necessities needed to survive.
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And what do we do with the loans already out there?
Also, not sure how my post is flamebait. I understand not agreeing but this is suppose to be a discussion. I'd love some suggestion on how to phrase what I wrote in a less flammable way.
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Not sure about the mods today. I didn't take that as flamebait or trolling in any manner. I must admit I didn't read your entire post before responding. I saw "what's your solution?" and proceeded with my default response to this topic.
In a more responsible world, we would tell people they can't buy it if they can't afford it but that is not the world we live in.
You live in the world you choose to live in. You and you alone, create that world within your own existence. It's up to you to have the discipline to not spend and to save. You've got to turn off the marketing and messaging in your own head where you feel like you've go
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I had the same problem. When I was in college in the 90s, there were tons of credit card stands giving free shirts or lunches. It didn't matter that I had no job since they counted finical aid as income.
It took 10 years to fix my errors (and a secured credit card) and now I never leave a balance on my cards. In fact, I'm so paranoid about losing control of my debt, that I usually pay off the cards as soon as the transaction posts.
It's unfortunate that a lot of these lessons have to be learned the hard wa
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Allow pay offs on current terms, unless terms are deemed usurous. Block or strictly manage new ones.
Buy now pay later Collage as well (Score:2)
Buy now pay later Collage as well costs way to much and for 18 year olds to be on the hook for $20-$40K+ /year as the guidance counselor says that you must go to collage.
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Last I checked, 2 years of community college then transferring your credits to the local extension of a state university didn't cost anywhere near that per year.
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The last time I checked, college was only ~$2k per semester.
Then again, I'm fifty-fucking-three and I haven't looked since I graduated.
Let's look together, shall we? First google result
https://educationdata.org/aver... [educationdata.org]
Report Highlights. The average cost of college* in the United States is $35,720 per student per year. The cost has tripled in 20 years, with an annual growth rate of 6.8%.
Oh look... that falls right in line with what OP posted and NOT with what you decided to post without checking to see if you were spreading BS.
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That number probably includes housing costs. You have housing cost if you don't live with your parents. Really has nothing to do with whether or not you are a student.
I was looking over SDSU and if I highball it for undergrads, it could maybe be 8-12k per semester. They had a ton of fees not included into the tuition. Quite overwhelming and I've no idea which one of those fees are for everyone and which may be for specific classes you may be taking that semester (lab classes cost more).
If you include the co
$3,372/yr vs. $9,580/yr (Score:2)
Thank you for digging up recent numbers.
By "community college", I was referring to the institutions listed as "2-Year In-State: $3,372" tuition per year in the article on educationdata.org. I was suggesting to exploit the price difference between this and "4-Year In-State: $9,580" tuition per year. Doing your first 2 years at a 2-year college while paying below-market room and board to one's parents and then transferring the credits for years 3 and 4 looks like it'd save several thousand dollars per year ov
Re: Good. (Score:4, Informative)
And when they do not give you a loan, you squeal that they do not give breaks and will not let you rise. Loans allow things to get built. Very few people would own a home if they couldnâ(TM)t get a loan. They would be paying rent or homeless until they saved up money. Same thing with cars, musical instruments, laptops and other things people go into debt to own. If you cannot buy a laptop on credit you lose many opportunities in terms of education and work.
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Or, you know, live with family until they can afford a home. Something that is very, very common in other countries.
Not every culture is eager to throw their children out on the streets the moment they turn 18.
But hey, America is all about family values, right?
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Not every culture is eager to throw their children out on the streets the moment they turn 18.
Neither is this one. That situation very very rarely happens in the US. Typically when it does, it's because the kid doesn't follow the household rules (i.e. uses drugs,) has dropped out of high school, has no plans at all for college or a job, etc. I remember hearing one such case, though the guy was 27, where he was always playing video games and basically didn't do anything else, left a mess of everything, had bad hygiene, etc. Basically like a typical redditor. Eventually his mom gave him an eviction no
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If you don't want the debt, then don't buy stuff you can't actually afford. Eliminating these programs would result in people just not getting to buy the stuff in the first place, for better or for worse.
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It's not just debt slavery. I can't talk about Anglosphere companies mentioned, but Klarna is an absolute shit show. Not only are their ways of handling their business often illegal in my home nation (several fines at this point), but their way of handling data has also been found illegal and fined.
They're a prototypical tech bro "we're growing so fast that law is just behind, so break it. We'll just pay fines later and whatever" company. They do not seem to care about laws, and because fines were made with
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You just described most tech firms. The big ones like Google, Microsoft, etc get fleeced in the EU regularly. Just the cost of doing business.
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Klarna is a domestic EU company though, not a multinational with most of its development outside of EU.
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Fuck these cancerous twats. We have enough debt slavery already.
Indeed. This is all about getting people into dept and then exploiting them long-term, nothing else. It is also about exploiting people with poor impulse control. Despicable.
I'm confused (Score:2)
What's the point of this, especially if, unlike traditional layaway, you get the product immediately? Is it for people who don't have / can't get a credit card? 'Cause MasterCard/VISA (etc) allow me to "buy (and get) now / pay later" -- although I *always* pay mine off in full every month...
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I'm guessing that these are probably targeted at people that can not qualify for a credit card, and they probably charge interest well in excess of a normal loan. It kind of reminds me of the payday loans that you used to see ads for all over the place.
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I'm guessing that these are probably targeted at people that can not qualify for a credit card, ...
Those people could probably still get a secured CC, deposit money onto that and use it to purchase things and obtain/boost their credit score toward qualifying for a regular CC. That said, I realize that people in this situation may either (a) not have time/funds to pursue this and/or (b) have insufficient money management skills to handle a regular CC responsibly. Still, having traditional credit-worthiness is valuable and I'm not sure using these BNPL schemes will help toward that.
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Those people could probably still get a secured CC, deposit money onto that and use it to purchase things and obtain/boost their credit score toward qualifying for a regular CC.
That's how I fixed my credit score (I ruined it by taking all the credit cards that came with free t-shirts at my college campus in the late 90's).
That said, I had to build savings to use that would then be unavailable to me for the secured card.
Nowadays, with online pay, it is pretty easy to stay on track for payments - as long as you have the funds. When I was a kid, and didn't understand how credit worked and what it affected, I'd wait to mail off a payment once the amount was high enough for me to thi
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That's how I fixed my credit score (I ruined it by taking all the credit cards that came with free t-shirts at my college campus in the late 90's).
I got a Sears credit card in 1983 when my girlfriend and I were on our way to a party and saw that Sears was giving 2-liter bottles of soda to people who applied for a Sears credit card (fun fact: they were non-standard shaped (more rectangular) then). We both applied, got our sodas and went off to the party. A short time later, I got the card, but she didn't. I used it fairly regularly over the years, but opted not to renew it in 2020 after the last Sears store close in my area -- it's been just a Sears
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That's sad, because not only did Sears have their own credit card that they ran themselves, but back in the 1980s when they were a conglomerate (rather than trying to concentrate on their "core competency" of failing retail stores) they created SPS (Sears Payment Systems) that manages other store branded cards and started Discover Card.
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Not only that, but a lot of credit cards will give you rewards, effectively rebating part of your purchase in exchange for using them.
I would say these services are like a credit card, but superior, And the requirements are basically the same - they are a line of credit, and they require the same credit check to open a Credit account as a CC account.
A credit card will charge you interest if you decide to pay over 6 months in general, which would cost more than any gains from rewards.
A Paypal Bill me lat
Re: I'm confused (Score:2)
I would never use one of these services, but I am someone who has no credit cards and a credit history that has been silent for over a decade. Maybe people like me, who generally have a distaste for the whole credit card schemes of extracting %1-3 of our consumer economy, but without my general distaste for debt.
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I pay mine every month so I make money with the money back rewards (I actually pay them every week.) I do this mainly to keep up a credit score for the next car I may need to buy.
That said, it is really easy to let it get out of control.
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The idea is that you can buy something now and pay it off over time rather than needing to find all the money at once.
So if you want to buy something costing $500, you can pay it off in 4 installments of $125 instead.
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The idea is that you can buy something now and pay it off over time rather than needing to find all the money at once. So if you want to buy something costing $500, you can pay it off in 4 installments of $125 instead.
Ya, like with a credit card.
Re: Everything in moderation (Score:2)
Retail companies get paid regardless. It's banks that secure the debt who get left with the bill.
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The retail co's get reimbursed by the banks. If banks belly up in a big recession (like in 2008-ish), retailers get nothing
Re: Everything in moderation (Score:2)
The most you'd lose out on is a month of revenue from one banking institution, while you'd still get all the revenue from the other hundreds+ of banks in the U.S. Not a big risk. For wider risk, you'd be assuming complete meltdown of the banking industry, in which case getting your month of bills paid is pretty far down on the list of worries.
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> month of revenue from one banking institution, while you'd still get all the revenue from the other hundreds+ of banks in the U.S
One? What if half of them are facing the same issue?
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If you progressives don't like exacerbated slumps and pandemics maybe you should look at the actual causes.
We had a business cycle, that usually had a breif but very temporary down turn periodically until the progressive showed up decided we have had to have a central bank again - than boom great depression!
We have had pandemics like the spanish flu in the past they pretty much ended in about the same time covid has been ruining now despite all the interventionist policy.
No serious conservative wants a 'mad
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Look up the depressions of 1890s
This is not layaway (Score:3)
Why would someone in authority say this has anything to do with layaway? It does not. It is the payday loan version of a credit card.
Layaway is where the company will set aside a product for you (lay it away) and you pay in installments. When you are finished paying, you get the product.
No predatory lenders required.
Re:This is not layaway (Score:5, Interesting)
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How does this differ from just saving the money on your own and buying the product when you have enough?
Unless you lack the willpower to save, what is the point?
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How does this differ from just saving the money on your own and buying the product when you have enough?
Unless you lack the willpower to save, what is the point?
That is exactly the point. I was a child at that the time. Having sufficient willpower to actually go in and make my payment each month was about all I could manage. Let's not ignore the psychological boost I would get every time I put my money down, I would get to see my eventual computer. (One like it on a shelf.) Even get to play with it for a few minutes.
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How does this differ from just saving the money on your own and buying the product when you have enough?
You get to buy the product while it's available rather than having to buy it from a scalper once it sells out.
Re: This is not layaway (Score:2)
I mean it sounds nice, but you're effectively still paying inflation and opportunity cost, all while tying your money up with a risky non-fiduciary, FDIC-agnostic institution. I can see why those services all disappeared.
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Re: This is not layaway (Score:2)
Layaway is also an Australian company that let's you pay for things in installments.. The difference being you get the item immediately and you then have a credit agreement with Layaway.
Old news (Score:3)
https://kotaku.com/how-much-it... [kotaku.com]
Point is, these ‘buy now pay later’ services seem to be the exact same deal, just re-packaged for a younger generation.
I saw a report a month last month:
According to a Credit Karma study, 34% of BNPL users have fallen behind on one or more payments. The survey found that 72% of users said they believe their credit score declined
That is a pretty alarming stat in my book. Is government regulation the answer? Well, unless you can magically make a more educated public in short order, it may unfortunately be needed.
Poor Choices (Score:1)
How is this different from ordinary credit? (Score:2)
When I charge something on my credit card, I also get both the product and debt now, and can pay the debt off over time.
I'm lost why this is a new industry and why it would need new regulation.
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credit cards? (Score:2)
What is the difference between "buy now pay later" and how credit cards work?
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What is the difference between "buy now pay later" and how credit cards work?
If I understand it correctly, a few things:
1. BNPL is for a single purchase. Yes, one can get a credit card, charge the one thing, and then never use it again...but in general, BNPL is for a particular purchase.
2. Ordinary credit cards have a relatively-up-front way that they work - buy a thing, and if you pay it off over time, you'll pay a known amount of interest on that thing, which is the nature of your relationship with the credit card company. BNPL advertises "interest-free" installments, with the cav
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What-a-bout the credit card companies? (Score:2)
Well, there goes ... (Score:2)
Talk about the pot calling the kettle black! (Score:1)
Buy now, pay later? (Score:2)
Buy stuff you don't need with money you don't have (Score:1)
More like "buy stuff you cannot afford" industry (Score:3)
Because that is the only real business model here. People that can afford what they buy do not need a loan.