Do “buy now, pay later” plans pose risks for Canadian regulators and consumers?

“Buy now, pay later” (BNPL) plans have become increasingly popular around the world. The Financial Consumer Agency of Canada (FCAC) has recently launched an investigation to review the sector’s regulations and its impact on consumer spending.  

The FCAC has the power to impose fines on federally regulated organizations that violate consumer protection regulations. However, senior associate and co-head of Torys’ Consumer Protection practice and Fintech group Brigitte Goulard told The Logic in an interview that “because some tech companies that offer BNPL aren’t covered by those regulations, responsibility for overseeing them could fall to the provinces.”

Currently, no Canadian province or territory has a framework in place that oversees the use of BNPL.

“One of the things that will worry FCAC about BNPL is it may potentially increase people’s reliance on credit,” Brigitte said.

“Are they going to be able to do something about it? I’m not sure.”

You can read more about our Consumer Protection work on our practice page.

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