"Buy now, pay later" Review of risks and remedies

The new "Buy now, pay later" financing formula (or "BNPL" for short) is increasingly
abbreviation) is becoming increasingly popular in Canada.
Unlike the old formula, it can be used to finance small purchases, and is offered by
companies such as Sezzle, Affirm, Afterpay and Klarna.
The emergence of these new models raises a number of questions, particularly with regard to
consumer protection. Our study focused on the possible risks associated with
credit/indebtedness, recourse/dispute resolution and consumer literacy about the
about the phenomenon.
As a result, we were able to consult the relevant regulations in force, the contracts
contracts/agreements of these companies, as well as the information available on their websites.
websites. We supplemented our data with two focus groups,
in Quebec and Ontario. This demonstrated the discrepancies between, on the one hand, the relevant legislation in force
and the content of agreements/contracts, on the one hand, and between consumer perceptions
the actual content of agreements and regulations.
On the subject of credit and indebtedness, for example, this research has revealed a lack of clarity in the interpretation of the contract.
the interpretation of the "buy now, pay later" contract as a credit contract, due to the diversity
credit contract, due to the diversity of practices, particularly with regard to fees and possession of a lender's license.
lender's license. As a result, credit provisions
to protect consumers from excessive debt were not always included in the agreements.
included in the agreements. In addition, certain practices, such as NSF fees (for insufficient funds)
(for insufficient funds), loan stacking and credit file registration.
With regard to recourse and dispute resolution, this research has highlighted
the need for an effective service to help consumers resolve their problems,
the existence of certain clauses that may limit consumers' access to justice, and
the need to clarify the application of chargeback to this phenomenon.
Finally, the research revealed a need for consumer literacy on the subject.