Afterpay Dupes Consumers Into Multiple Fees, Claims Class Action Lawsuit

Afterpay tells consumers that they can buy now and pay later with their service, but then causes multiple, unexpected bank fees, alleges a class action lawsuit filed in California federal court Thursday.  

Lead plaintiff, Brooke Miller, claims that Afterpay targets young and poor consumers by marketing its service as a way they can get the items they need now and pay later without being charged interest or fees. Miller seeks to represent a nationwide Class of consumers who she says were deceived by Afterpay’s marketing and ended up shouldering “huge, undisclosed fees and interest” after using the service.  

“The concept of ‘buy now, pay later’ has existed since the birth of credit cards,” explains the class action lawsuit. “Afterpay has expanded this concept to offer point-of-sale loans for online and in-store purchases through its mobile app, allowing users to avoid paying in full for products at hundreds of online and in-person stores by breaking up payments into four installments—allowing users to pay off a purchase over the next six weeks.” 

Miller, a Missouri resident, says she lives paycheck to paycheck and decided to use Afterpay for some purchases because of the company’s marketing messages assuring her she would not have to pay any fees or interest. Miller says that when her first payment to Afterpay was automatically deducted from her bank account, it triggered an unexpected overdraft fee from her bank.  

Miller claims that she and other consumers who live on tight budgets are particularly susceptible to overdrawing their accounts; however, Afterpay fails to notify consumers that they may be subject to bank overdraft and/or non-sufficient fund (NSF) fees and penalties when the company automatically deducts money from their account.  

Indeed, Miller claims that the payment Afterpay deducted from her account, amounting to just over $15, resulted in a $35 bank fee.  

“Afterpay’s marketing never warns consumers of the extreme and crushing NSF and overdraft fee risk of using the service,” alleges the class action lawsuit.  

Miller alleges that she and other low-income consumers would not have used the Afterpay service had they been warned of the risk of multiple fees that could be assessed on their bank accounts.  

The class action lawsuit is seeking damages on behalf of a Class of consumers who signed up for Afterpay and incurred overdraft or NSF fees after the company deducted money from their account.  

Have you used Afterpay and been hit with unexpected overdraft or NSF fees? We want to hear from you! Tell us about your experience in the comment section below.  

The lead plaintiff is represented by Jeffrey D. Kaliel and Sophia G. Gold of Kaliel Gold PLLC and Taras Kick and Jeffrey C. Bils of The Kick Law Firm, APC.  

The Afterpay Deceptive Fee Class Action Lawsuit is Miller v. Afterpay US, Case No. 3:21-cv-04032 in the U.S. District Court for the Northern District of California.  

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