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A New York woman accuses Affirm Holdings, Inc of tricking consumers into purchasing more, and paying high fees later, with “buy now, pay later” (BNPL) payment plans, in a class action lawsuit lodged Monday.
Lead plaintiff, Judith Shephard, wants to represent other New York consumers who were allegedly duped into Affirm BNPL payment plans that encourage higher spending and make returns tricky. She says the company’s practices violate New York consumer protection laws.
Shepard says that she relied on Affirm’s marketing when deciding between the company’s BNPL payment plan and using a traditional credit card to make certain purchases. She says that, as a result of Affirm’s deceptive marketing, she was hit with excessive fees. She also claims that the company failed to protect her interests in disputes with merchants participating in its BNPL payment plans.
Affirm offers reverse “layaway” payment plans that “encourages spending on items that otherwise could not be afforded,” explains the class action lawsuit. Under the plans, customers buy something and are then required to make payments until they have paid off that purchase.
Affirm partners with retailers and encourages spending on trendy clothing and jewelry, says the class action lawsuit. Shepard claims that Affirm’s “buy now, pay later” promises result in payments that are hard to track, resulting in high fees for consumers.
In addition, Affirm is unable to provide refunds, making it difficult for consumers to return defective items to the retailer, points out the plaintiff. Consumers who return items are still required to make installment payment to Affirm, alleges Shepard, and do not have the option to dispute the transaction as they would with a credit card company.
“Affirm touts itself as an alternative to ‘traditional’ lenders like credit cards, payday loans and banks,” states the class action lawsuit pointing out that the company targets millennials who mistrust credit cards. “However, the interest rates charged through Affirm exceed most credit cards, without any of the protections of this regulated form of payment.”
The class action lawsuit accuses Affirm of negligent misrepresentation, unjust enrichment, and violating New York general business law.
Shepard wants to represent other New York residents who made purchases using Affirm BNPL payment plans. She wants Affirm to pay damages to Class Members and stop its allegedly illegal marketing and payment plan practices.
Have you used Affirm payment plans to make a purchase? We want to hear from you! Tell us about your experience in the comment section below!
The lead plaintiff is represented by Spencer Sheehan of Sheehan & Associates, P.C.
The Affirm Deceptive Payment Plans Class Action Lawsuit is Shepard v. Affirm Holdings, Inc., Case No. 7:21-cv-05241 in the U.S. District Court for the Southern District of New York.
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304 thoughts onAffirm ‘Buy Now, Pay Later’ Payment Plans Dupe Consumers, Says Class Action Lawsuit
I was stranded at the airport and needed a last minute flight to replace a canceled flight. It was 3 a.m. and there was no customer service around. I tried buying a ticket on my phone, but the payment method did not go through, so I tried with affirm, which also did not work. I had to wait until staff came at 4 a.m. and purchase a ticket directly with them by credit card at the terminal. However, Affirm proceeded to charge me for not one but TWO tickets anyway, tickets that I never received from them, and the “loan” was only approved three days AFTER the flight. How do you sell someone a ticket for a flight 3 days in the past? I tried calling to get the charges cleared and their customer service refused to do this. The air carrier cannot refund without a ticket number, and I never received the tickets. This ruined my vacation. Affirm won’t relent in insisting on charging me for non-existent tickets. I’ve had to spend hours on the phone dealing with this and it is still not resolved.
I used the affirm app to rent a car first carla,then rental car.com the carla rental got declined the rental car.com went through only to be canceled an hour later but affirm is still billing me for the purchase
I only had one return, and it happened last year. I submitted the needed information and proof the Dyson had sent the money back to the lender. Affirm closed my case without any action and I had to follow up again on my own. They’re trying to say it’s been resolved but the contract I signed on that purchase said otherwise. The conflicting information and lack of willingness to work on their end is why this is ongoing. I was told by affirm’s customer service rep to keep making the payments, but in reality, the refund should’ve covered most of the remaining payments (per the contract).
I have used Affirm quite a few times in the past, I started to have tons of issues with them the last time I used them they were ridiculous I ran into bank issues with them taking double payments, they were not supposed to do, which created overdraft issues for me!! It was a mess, so I filed did not authorize disputes against them through my bank got my back. Did not pay them of course could not speak to a person, now on my credit report a collection company!! I never ever should have done this with a company like this!
Please add me to class action lawsuit.
They charged me twice for two items I didn’t receive. I finally paid them off because they were harassing me with email & notices. I called them & very rude. More than one time. They told me to call Amazon. Amazon said to call Affirm. They fraudulent overcharged me for items I don’t have & then added interest to that.
In 2022 I purchased a phone from Walmart. Affirm popped up and offered me a “loan”. I could afford the purchase, but thought it would be an opportunity to increase my credit score. I’d done this in the past succesfullywith Smartpay…so I took a chance and applied. I received a denial, so my purchase payment was captured by Walmart from my bank account. Then I received an email from Affirm stating they would begin auto pay monthly. I called Walmart, and they confirmed that they had received my payment, and that no money was captured from Affirm. After the first auto-pay, I again called Affirm and relayed this info to the representative. He suggested that I discontinue auto pay, which I did. I have spoken to Affirm at least 7 times, and sent them screenshots of all communication with them. They referred my case to Accord a collection agency. I am still being dogged by them via, texts, emails and phone calls. I refused to be bullied into paying twice.