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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
Not sure if I could be added on this, but someone stole my identity, applied for a loan with affirm, and affirm approved it. Now they say they can’t prove I wasn’t the one who did it. Filed a police report and everything… So disappointed.
That happen to me. The criminal made several loans mount to 4000 and was able to make a payment on one of the loans from my bank account all in the same day. They changed my email and my information, locking me out of my account. Affirm never to this day fixed it and sent my account to collections.
I was trying to buy myself a necklace for my 51 birthday on Affirm thru KAY Jewelers it was on sale $179 call the 1800 # they told me the purchase went through so I started paying $45 a month finished paying trying to get my merchandise called Kay they told me to talk with Affirm because they don’t have a order number and Affirm telling me to speak to Kay meanwhile I’m out of $180.00 and no necklace
I have used affirm and have 2 loans with them now
Please add me!
Add me plz
Please add me.
Add me please
I too purchased items through Affirm! Add me
Please add me. I have financed through Affirm and currently paying a loan.
Please add me