Sezzle Class Action Alleges ‘Buy Now, Pay Later’ Claim Misleads Customers

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Sezzle Buy Now, Pay Later Class Action Lawsuit Overview: 

• Who: Michael Sliwa filed a class action lawsuit against Sezzle Inc. 
• Why: Sliwa claims Sezzle fails to inform consumers that using its “buy now, pay later service” can lead to bank overdraft or non-sufficient fund fees. 
• Where: The class action lawsuit was filed in California federal court. 

Sezzle deceives consumers about the true risks of fees they can incur by using its “buy now, pay later” service, a new class action lawsuit alleges.

Plaintiff Michael Sliwa claims Sezzle targets “poor consumers and those struggling to make ends meet” while failing to represent the “true operation and risks of the service.”

Sliwa claims consumers are at risk of incurring overdraft or non-sufficient fund (NSF) fees with their banks due to “automated Sezzle transfers” directly from their accounts.

“While Sezzle’s marketing representations warn that Sezzle may charge users fees when there are insufficient funds for a payment, they never warn users of the even more damaging outcome: repeated bank fees from users’ own banks for using the Sezzle service,” the Sezzle class action states. 

Sezzle Class Action Claims ‘No Reasonable Customer” Would Use Service Due To Fee Risk

Sezzle’s buy now, pay later service purports to “offer a solution” to consumers who want to make a purchase for an item they can not afford to pay for in full, according to the Sezzle class action. 

Sliwa claims, however, that Sezzle does not warn consumers that they may end up incurring overdraft or NSF fees to their bank accounts. 

“These representations and omissions are deceptive. In fact, there are huge, undisclosed fees and “interest” associated with using the service,” the Sezzle class action states. 

Sliwa argues that “no reasonable consumer” would “run the risk” of using Sezzle’s buy now, pay later service if they were aware that receiving NSF or overdraft fees with their bank was a “likely and devastating consequence” of using it. 

“Had Plaintiff and the Class members known of the true operation and risks of the Sezzle buy now pay later service, they would not have used the Sezzle service,” the Sezzle class action states. 

Sliwa claims Sezzle is in violation of California’s False Advertising Law and Unfair Competition Law and Minnesota’s Consumer Fraud Act. 

Sliwa wants to represent a nationwide class of consumers who have incurred an overdraft or NSF fee after using Sezzle’s buy now, pay later service. 

Plaintiff is demanding a jury trial and requesting declaratory and injunctive relief along with actual and punitive damages for himself and all class members. 

A similar class action lawsuit was filed this month against Klarna by a consumer arguing the company’s buy now, pay later service tricks users into believing there will be no fees associated with using it. 

Have you received an overdraft or NSF fee from your bank after using Sezzle’s buy now, pay later service? Let us know in the comments!

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