Seven leading Buy Now Pay Later companies are facing new scrutiny from Senate Democrats who have requested detailed information not only on loan origination and usage but also on collection activities, delinquency trends, and repayment behavior. The letters were sent to Affirm, Afterpay, Klarna, PayPal, Sezzle, Zip, and Splitit, highlighting growing concern about consumers’ ability to repay these rapidly expanding forms of credit.
For the credit and collection industry, the message is clear: lawmakers are increasingly focused on how BNPL lenders handle missed payments, pursue past due debts, and manage their loss and recovery practices.
The senators cite multiple indicators that repayment stress is rising among BNPL borrowers. In April 2025, 41% of BNPL users reported making a late payment within the prior year, a sharp increase from the year before. Many consumers hold multiple BNPL loans at once, and borrowers who take out BNPL loans also carry substantially higher balances on traditional unsecured credit. On average, a consumer originating a BNPL loan held $871 more in credit card debt than similar peers who did not.
Those patterns raise concerns about consumers’ ability to keep up with repayment obligations, which in turn elevates the importance of how BNPL companies structure their collection processes.
Each letter requests specific data about loan performance, repayment timelines, missed payments, and how often consumers fall into late status. The senators also want to know:
- How many consumers miss one or more scheduled payments
- How autopay failures contribute to delinquency
- How often BNPL providers pursue fees
- Whether collection activity escalates to outside agencies
- What internal policies govern attempts to recover past due debts
These questions reflect a deeper interest in understanding the full lifecycle of BNPL loans, not just their origination. The lawmakers also highlight the fact that many BNPL loans do not appear on credit reports, reducing visibility into overall borrower indebtedness and limiting traditional tools used to assess credit risk and repayment behavior.
The senators point to the Trump Administration’s withdrawal of a CFPB interpretive rule that previously classified BNPL providers as credit card issuers and creditors, which would have imposed additional consumer protections. With the CFPB deprioritizing enforcement in this space, lawmakers say there is less oversight of lending and collection activities than in prior years.
