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In a concerning development for American consumers, the Consumer Financial Protection Bureau (CFPB) has announced it will stop enforcing crucial protections for users of Buy Now, Pay Later (BNPL) services. This decision represents yet another step in the ongoing dismantling of consumer safeguards under the current administration, leaving millions of Americans vulnerable to potential financial harm.

The CFPB's Changing Role

The CFPB was established as a powerful federal agency dedicated to protecting consumers in financial transactions. However, recent months have seen a dramatic shift in the Bureau's priorities. Under new leadership, the agency has rolled back numerous consumer protections, dropped most of its enforcement actions, and become entangled in litigation over Acting Director Russell Vought’s attempts to cut nearly 90% of the Bureau's staff.

The latest casualty in this retreat from consumer protection is the Buy Now, Pay Later (BNPL) Rule. The BNPL Rule requires lenders who offer payments in installments (e.g. $100 now, or $20 per month) to give customers the right to dispute charges, demand refunds after returning products, and receive periodic billing statements. These protections are now at risk as the CFPB has announced it will stop enforcement related to BNPL violations.

While this rule technically remains on the books, the Bureau's May 6, 2025 announcement makes it clear that violations will not be pursued, effectively rendering these protections meaningless. More concerning still is the Bureau's statement that it is "contemplating rescinding the Rule" entirely.

What Protections Are Being Abandoned?

The BNPL Rule was designed to provide essential safeguards for consumers using these increasingly popular payment options. The rule required BNPL lenders to:

• Provide consumers the right to dispute charges, with mandatory investigations by the lender
• Allow consumers to demand refunds after returning products
• Furnish periodic billing statements to help consumers track their payment obligations

These protections weren't created on a whim - they addressed real problems identified through extensive research. The CFPB found that 13% of BNPL transactions involved a return dispute, and in 2021 alone, consumers disputed or returned $1.8 billion in transactions across just five surveyed BNPL firms. Without these protections, consumers are left with little recourse when disputes arise.

The Real-World Impact

In recent years, BNPL services have exploded in popularity, particularly among younger consumers and those with limited access to traditional credit. These payment plans allow everyday Americans to make purchases through installments, often without interest if paid on time.

However, the convenience of these services comes with substantial risks. Without enforcement of the BNPL Rule, consumers who receive damaged goods, never receive their purchase, or need to return items may find themselves still on the hook for payments. The lack of standardized billing statements can lead to missed payments and unexpected fees, potentially damaging credit scores and creating financial hardship for those with the most need.

Protecting Yourself in the New Landscape

With federal protections now effectively suspended, consumers must take additional steps to protect themselves when using BNPL services:

1. Consider alternatives: When possible, delay purchases until you can pay the full amount at once, eliminating BNPL risks entirely.
2. Document everything: Take screenshots or save copies of all payment dates and terms before completing a BNPL transaction.
3. Calendar payment dates: Since most BNPL plans require automatic payments, mark each due date and ensure sufficient funds are available to avoid overdraft fees.
4. Use caution with returns: Limit BNPL use to items you're confident you won't need to return.
5. Consider delivery risks: If you live in an area where packages are frequently lost or stolen, recognize that you may not be guaranteed a refund but will still be responsible for payments.

We’re Here to Help

The CFPB's retreat from enforcing the BNPL Rule is not an isolated incident; it’s part of a broader pattern of regulatory withdrawal that leaves consumers increasingly vulnerable. As financing options become more complex and digital services more prevalent, strong consumer protections are more important than ever.

At Singleton Schreiber, we understand the challenges consumers face when regulatory protections falter. Our consumer protection attorneys are committed to fighting for individuals harmed by unfair financial practices, including those related to BNPL services. While federal enforcement may be on pause, consumers still have rights under state laws and other federal statutes.

If you've experienced issues with a BNPL service—such as being denied a refund for returned items or facing unauthorized charges—our team is here to help navigate your options for seeking justice.