Afterpay To Refund $1.5 million To Consumers
Following an inquiry launched last year, Afterpay Touch has agreed to refund US$905,000 of late fees paid by 640,000 Californian consumers and pay a further 10% administrative fee to the California Department of Business Oversight (DBO).
Afterpay must issue these refunds within 45 days.
According to the DBO, these late fees were essentially illegal loans, as “Afterpay had engaged in the business of finance lender without obtaining a required licence”.
Although Afterpay rejected that it had operated illegally, it has agreed to only offer products in California under the finance lender’s licence granted by the DBO to a wholly owned subsidiary of its US business.
The DBO stated: “Like other point-of-sale financers, Afterpay targets young consumers who are unable to qualify for traditional financing options like credit cards.”
This development follows a tough month on the ASX for the company. Over the past month Afterpay share price has fallen by more than 50%, from $39.52 on the 17th of February to $19.28 today.
In Australia, Afterpay payments are supported at Myer, Target, Big W, and Bing Lee, among other retailers.