Maryland Office of Financial Regulation Issues Order to “Buy Now Pay Later” Company Four Technologies Inc. for Unlicensed Consumer Lending

Company Must Make over $184,000 in Refunds to Maryland Consumers

BALTIMORE, MD (May 16, 2024) – The Maryland Department of Labor’s Office of Financial Regulation today announced entry into a settlement agreement and consent order with “Buy Now, Play Later” company Four Technologies, Inc. (“Four”) for violating Maryland lending law. As a condition of the order, the company has agreed to pay $45,000 in civil penalties and refund more than $184,000 to 2,467 impacted Maryland consumers.

“Buy Now, Pay Later” (BNPL) is an increasingly common way for consumers to immediately purchase a product, usually online, with little or no initial payment and then pay off the balance through a fixed number of installments. The Office of Financial Regulation determined that BNPL is a loan under Maryland law, and therefore any companies using this financing approach need to be licensed as a loan provider. Four did not have the required licensing to do these transactions with Maryland consumers.

“The Maryland Office of Financial Regulation is committed to upholding consumer rights and ensuring that companies operating in Maryland adhere to the law,” said Maryland Department of Labor Secretary Portia Wu. “Over 2,000 Maryland consumers will now receive the refunds they’re entitled to. Under Maryland law, Buy Now, Pay Later transactions are considered loans, and therefore require the consumer protections our law provides.”

Although BNPL loans typically do not include interest, most BNPL companies charge late fees and may refer an account to a collection agency if the balance is unpaid.

“Our Office found that Four was engaged in making loans or extensions of credit to Maryland consumers without first obtaining the appropriate license,” said Commissioner of Financial Regulation Antonio P. ‘Tony’ Salazar. “Maryland’s Consumer Loan Law covers BNPL transactions, ensuring that consumers benefit from strong protections, including disclosure requirements, interest rates, and fee restrictions. BNPL companies cannot operate under the guise of purchasing credit sales contracts from retailers to evade Maryland’s law and consumer protections.”

The Maryland Office of Financial Regulation within the Maryland Department of Labor plays a crucial role in safeguarding Marylanders' financial interests. It oversees the operations of lenders, collection agencies, money transmitters, credit reporting agencies, and other financial service providers through licensing and regular examinations and investigations. The office is also responsible for enforcing Maryland’s consumer financial laws, ensuring that Marylanders can conduct their financial transactions through secure, stable, and well-managed institutions.

Maryland consumers can submit complaints about financial services companies to the Office of Financial Regulation, verify that a company is licensed to do business in Maryland and view past enforcement actions by visiting labor.maryland.gov/finance.

The Four Technologies, Inc. Consent Order and Settlement Agreement is available at labor.maryland.gov/finance/consumers/frfy2023-fourtechnologies.pdf.

The Department of Labor strives to create an equitable and inclusive Maryland where all residents have the opportunities and resources to attain financial stability, reach their career potential, and contribute to their communities; where businesses have access to capital and the skilled workforce they need to succeed; where workplaces are safe and well-regulated; and where the economy is resilient and growing. For updates and information, follow Labor on LinkedIn, Twitter, Facebook, and visit our website.

MEDIA CONTACT:
Jamie Mangrum