Connecticut Attorney General William Tong joined a coalition of 19 attorneys general to submit comments to the CFPB, urging robust consumer protections for buy-now-pay-later (BNPL) lenders. The coalition expressed concerns that BNPL loans may trap consumers in debt through hidden fees, inadequate disclosures, and improper data monetization practices.
In-house legal teams should review all agreements involving BNPL services, including merchant partner agreements (between BNPL lenders and retailers), consumer loan agreements, and data processing addendums. Key clauses to scrutinize are fee structures and disclosure sections (to ensure clear, conspicuous presentation of all costs, including late fees and installment terms), data sharing and monetization provisions (to verify lawful consent and limitations on selling transaction data), credit assessment and approval processes (to prevent predatory targeting of vulnerable borrowers), and default/collection terms (to avoid debt trap cycles). Required changes may include implementing explicit, separate consent for data sharing, capping late fees, providing clear APR calculations, and incorporating debt counseling resources or opt-out mechanisms for recurring payments.
Entity
Buy-Now-Pay-Later Lenders
Also known as: BNPL Lenders
Industry
Financial ServicesOfficial Press Release
https://portal.ct.gov/ag/press-releases/2022-press-releases/ag-tong-urges-protections-from-buy-now-pay-later-lenders
2022325 cfpb state ag comment letter on bnpl providers 20220
https://portal.ct.gov/-/media/ag/press_releases/2021/2022325-cfpb--state-ag-comment-letter-on-bnpl-providers-20220002-87-fed-reg-3511.pdf?rev=581266f1bd244fe0af7fac119c3f660d&hash=9F43F1613AB9CD38797ABAF7BB658619
Connecticut Attorney General Enforcement Page
https://portal.ct.gov/AG/Privacy/Privacy-Resources
$500K
Connecticut Attorney General William Tong announced settlements with SunRun, Inc., Elevate Solar Solutions, and two salespeople over allegations of deceptive solar sales, including impersonating consumers and locking homeowners into long-term contracts without consent. SunRun must pay $300,000 and provide consumer relief; Elevate and the salespeople face a stated $200,000 penalty, with $100,000 suspended subject to ongoing compliance.
$8.0M
Connecticut announced an $8 million settlement with Mylan over allegations that it used agreements to delay generic EpiPen competitors and took other actions that inflated prices. Mylan also agreed to provide 10,000 free EpiPens; the release states that Mylan denies wrongdoing.
Connecticut Attorney General William Tong joined a coalition of 22 attorneys general in filing an amicus brief challenging DHS’s policy and practice of conducting warrantless civil immigration arrests. The press release describes a court challenge, not a privacy enforcement action or monetary penalty.
$625K
Connecticut reached a $625,000 settlement with Frontier Communications Parent Inc. over an April 2024 breach in which compromised employee and vendor credentials were used to access internal systems and exfiltrate unencrypted personal information of 58,841 Connecticut residents. The settlement requires Frontier to strengthen its security program, implement specific safeguards and training, and obtain an independent third-party assessment.
$2.6M
Connecticut and New York found that Boston Children’s Health Physicians and its security vendor, XTIUM, failed to use reasonable safeguards, resulting in hackers accessing sensitive personal, medical, and employee information. The companies agreed to pay penalties totaling $2.64 million and implement enhanced cybersecurity measures.
Connecticut joined a coalition of state attorneys general filing a notice in Character Technologies, Inc.’s bankruptcy proceedings, raising concerns about the company’s safety and privacy practices and the sensitive information it holds. The states seek protections for children and consumers if the company’s business or assets are sold or transferred; the filing does not impose a fine or other remedy.