In this episode of the “Point-of-Sale Finance” series, Jason Cover is joined by colleagues Erin Edwards and Simon Fleischmann from Troutman Pepper Locke’s Consumer Financial Services practice to shift the lens from regulatory compliance to litigation risk. The conversation broadens the frame beyond Buy Now, Pay Later (BNPL) to the full point-of-sale credit ecosystem (Pay in 4 products, embedded installment loans, retail installment sales contracts, and private label retail cards), explaining why litigation risk turns less on how a product is marketed and more on what the consumer saw, what they were told, and what happened when something went wrong after checkout.
The episode traces the impact of the Consumer Financial Protection Bureau’s 2024 BNPL interpretive rule and its May 2025 withdrawal, making clear that regulatory retreat does not reduce exposure. Instead, it shifts the battleground to state statutes, private plaintiffs, and existing federal law. Simon and Erin then dig into Fair Credit Reporting Act (FCRA) litigation on both ends: the front-end permissible purpose question when a credit report is pulled at checkout, and the back-end furnishing duties triggered when payments, refunds, and disputes are reported to credit bureaus. The discussion also covers the surge in pro se litigation, autopay and fee theories emerging as class actions under Truth in Lending Act (TILA) and Electronic Fund Transfer Act (EFTA), and the merchant-side risks around refund flows and dispute handoffs.
The episode closes with a practical triage framework for managing point-of-sale litigation risk, including how to audit checkout scripts, preserve authorization and disclosure records, and structure merchant contracts to reflect operational reality — so that when a dispute arises, the evidence file is already built.