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
I love Affirm! Twice now I’ve been able to buy the iPhones that I really wanted at an affordable price with reasonable monthly payments. I have absolutely no complaints.
Yes I was charged like $250 for express shipping and didn’t get until 4 days later and was still billed. Couldn’t return nor refund. ADD ME
TERRIBLE EXPERIENCE WITH THEM TO PURCHASE MEDICAL DEVICE. MY HSA CARD INITIALLY MADE PAYMENTS THEN NO LONGER RECONIZED THEM AS AN AUTHORIZED VENDOR. I WAS NOT NOTIFIED UNTIL THE DATE THE PAYMENT WAS DUE, RESULTING IN LATE PAYMENT. WITHIN 2 DAYS OF INCIDENT I HAD A CHECK DIRECTLY MAILED FROM MY HSA ACCOUNT TO PAY THE ENTIRE BALANCE OFF AND AFFIRM “DIDN’T RECEIVE” THE PAYMENT FOR 2 MONTHS RESULTING IN A DELINQUENT ACCOUNT AFFECTING MY CREDIT SCORE.
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I use them for purchases…please add me
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I’ve been using them over a year for purchases. Have paid over $3,000 and is currently paying on several purchases. Pls add me