Buy now, pay later Company agrees to stop illegal lending and refund settlement refunds
The DFPI reached a settlement with Florida-based point-of-sale lender Four Technologies, Inc., in which the company agreed to stop making loans, pay $2,500 in penalties, obtain a license and to reimburse $13,065 in illegal charges.
These refunds represent fees that Four Technologies collected from consumers in connection with transactions concluded by the DFPI as illegal loans. Under the settlement, Four Technologies will only make future loans to California residents after obtaining a license from the California Finance Act (CFL).
In late 2021, the DFPI reported a shift to Buy Now, Pay Later products, and an increase in consumer use of Buy Now, Pay Later products is coming under scrutiny from regulators. The DFPI continues to lead the way in oversight, clarifying late last year that BNPL products are loans and that companies offering them must comply with California state lending rules.
The DFPI continues to investigate other companies offering Buy Now, Pay Later products. In 2020, the DFPI (formerly Department of Business Oversight) entered into similar agreements with Buy Now, Pay Later, Quadpay, Sezzle, Afterpay US, and Klarna, Inc.
The DFPI licenses and regulates financial services, including state chartered banks and credit unions, money issuers, stock brokers, investment advisers, non-bank installment lenders, lenders payday, mortgage lenders and managers, escrow companies, franchisors, etc.