The DFPI has entered a settlement with Florida-based point-of-sale lender Four Technologies, Inc., in which the company agreed to stop making loans, pay $2,500 in penalties, obtain a license and reimburse $13,065 in illegal fees.
These refunds represent fees that Four Technologies collected from consumers in transactions that the DFPI concluded were illegal loans. Under the agreement, Four Technologies will make future loans to California residents only after obtaining a California Financing Law (CFL) license.
At the end of 2021, the DFPI reported on the switch to Buy now, pay later products, and an increase in consumer use of Buy Now, Pay Later products is coming under scrutiny from regulators. The DFPI continues to lead the way on oversight, clarifying late last year that BNPL products are loans and that companies offering them must comply with California state lending standards.
DFPI continues to investigate other companies that offer Buy Now, Pay Later products. In 2020, the DFPI (formerly Department of Trade Supervision) signed similar agreements with companies Buy now, pay later quadruple, sizzle, Afterpay USAY Klarna, Inc..
The DFPI licenses and regulates financial services, including state-chartered banks and credit unions, money transmitters, stock brokers, investment advisers, non-bank installment lenders, payday, mortgage lenders and servicers, escrow companies, franchisors and more.