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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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305 thoughts onAffirm ‘Buy Now, Pay Later’ Payment Plans Dupe Consumers, Says Class Action Lawsuit
OMG! Wish I’d know how it all worked ahead of time! Now I’m stuck with outrageous amount!
Add me please
Add me please. I’ve had a few loans with them
Please add me I’ve had several loans with them
Please add me
I have used affirm several times. Never a problem. I have made returns to the merchant and also got a refund to my affirm account. I use a credit card to set up auto pay and it pays it monthly if I carry a balance. The app is easy to track payments.
I have used affirm several times. NEVER A PROBLEM. I have made returns to the merchant and have also gotten a refund to my affirm account. I use credit cards to setup autopay and it pays it the installments as specified in the agreement. I log into the website and can see the agreements, that match my checkout and email. I’ve done SEVERAL transactions.
Just started doing business with them, Will wait and see.
Please add me to this lawsuit
Add me please. I have used and am using now and have been paying forever!!
Please add me
Please add me to this also
I purchased a laptop I kept very good records and knew how much I owed,when I wanted to pay it off Affirm raised the balance and wanted more money,,
I purchased bedroom furniture at One Stop Bedrooms and had it financed through Affirm. When I tried to transfer the balance to a lower interest credit card, I was told that I had to pay with a debit card or cash. This was not stipulated at the time of purchase. Affirm charges 28% interest which means that you pay way more than the original purchase price of the item. Please include me,
Add me please