New York City Urges State to Crack Down on "Buy Now Pay Later" Debt Traps
September 21, 2026
DCWP Calls on State Department of Financial Services to Strengthen Protections Against Predatory Medical Payment Products
NEW YORK, NY – Commissioner Samuel A.A. Levine and the New York City Department of Consumer and Worker Protection (DCWP) submitted official comments on New York State’s proposed rules regarding the Buy Now Pay Later industry. This includes six specific recommendations to strengthen the rules, including explicit protection against increasingly popular and often predatory “Care Now Pay Later” and “Rent Now Pay Later” financing products. DCWP also recommended to the State that it grant parallel enforcement authority to the City to ensure New Yorkers are sufficiently protected.
“New Yorkers seeking any kind of health care should never have to choose between getting the treatment they need and falling into a cycle of overwhelming debt,” said DCWP Commissioner Samuel A.A. Levine. “Our recent lawsuit against two Brooklyn dental providers shows how devastating the consequences can be when vulnerable patients are pressured into risky financial products. As ‘Buy Now Pay Later’ becomes more and more ubiquitous, this agency is doubling down on protecting consumers.”
DCWP’s comments were largely supportive of the Department of Financial Service’s (DFS) proposed regulations. The agency’s recommendations come as it pursues legal action against Brooklyn-based dental providers accused of driving vulnerable patients into debt through “Care Now Pay Later” financial products. Studies show that while one in four Americans report using a Buy Now Pay Later (BNPL) product in the past year, most of these consumers already carry significant financial burdens. Urging people to enroll in these products with just a few clicks—without fully understanding the terms and conditions—can lead to severe financial consequences.
The agency also urges DFS to ensure it is using its authority under Section 1042 of the Consumer Financial Protection Act, which allows the state to enforce against abusive and unfair conduct broadly—which could mean ensuring that CNPL products that don’t qualify as BNPL under DFS’s current definition, such as medical credit cards, are also held to the same standards of transparency. DCWP remains committed to working with DFS and other government partners to protect New Yorkers from predatory financial practices.
About “Buy Now Pay Later”
“Buy Now Pay Later” financial products are a type of short-term debt financing that allow consumers to pay for a purchase in small installments over a set period. New Yorkers, like those struggling with affordability nationwide, have turned to BNPL products with more regularity, using these loans to pay for everyday necessities like groceries and medical care.
BNPL loans disproportionately cause harm to consumers who already have credit card debt and are underserved by institutional financial services. According to a 2025 Lending Tree survey of 2,000 U.S. consumers, more BNPL users now report being late or unable to make payments: 41% compared to 34% in 2024. Exacerbating the potential harm of these loans’ use, BNPL providers are not required to report payment information to credit bureaus. Without standardized credit reporting requirements, BNPL loans may negatively impact consumers’ credit for missed payments.
Data collected from DCWP’s free Financial Empowerment Centers between June 2023 and August 2026 found that, BNPL borrowers in New York City are disproportionately young, female, lower-income, and living in financially vulnerable neighborhoods.
Among clients with BNPL loans:
- 75 percent of BNPL borrowers had annual incomes below $57,000;
- 30 percent were unemployed;
- The majority were between the ages of 18 and 34;
- Households in the Bronx account for 48 percent of BNPL consumers in the city;
- BNPL users had median savings of just $600, compared to $2,800 among consumers who had not used BNPL; and
- Consumers using BNPL carried a median debt balance of approximately $11,690, compared to approximately $8,519 among consumers carrying debt who had not used BNPL.
DCWP urges consumers to never sign up for a Buy Now Pay product before a full review of terms and conditions. New Yorkers can report deceptive practices at nyc.gov/consumers.
DCWP is the nation’s leading municipal enforcement agency, charged with delivering economic justice. We bring New Yorkers real economic relief and protect them from predatory, deceptive, and unfair practices that violate their rights as consumers and workers. This includes pioneering cutting-edge protections for New Yorkers, such as the City’s Consumer Protection Law, Protected Time Off Law, Fair Workweek Law, and Delivery Worker Laws. Across New York City, DCWP levels the economic playing field by licensing more than 45,000 businesses in over 45 industries, and providing essential services including free tax preparation and financial counseling to ensure New Yorkers keep more of what they earn and can plan for their futures. This work ensures that New York City is a fairer, more affordable place to live for all. For more information about DCWP and its work, visit DCWP at nyc.gov/dcwp or follow on X, Facebook, Instagram, TikTok, and YouTube.
Media Contact:
Milo Fink Gringlas
Department of Consumer and Worker Protection
(646) 772-0331
press@dcwp.nyc.gov