Connecticut Attorney General William Tong joined a coalition of 19 attorneys general to submit comments to the CFPB, urging robust consumer protections for buy-now-pay-later (BNPL) lenders. The coalition expressed concerns that BNPL loans may trap consumers in debt through hidden fees, inadequate disclosures, and improper data monetization practices.
In-house legal teams should review all agreements involving BNPL services, including merchant partner agreements (between BNPL lenders and retailers), consumer loan agreements, and data processing addendums. Key clauses to scrutinize are fee structures and disclosure sections (to ensure clear, conspicuous presentation of all costs, including late fees and installment terms), data sharing and monetization provisions (to verify lawful consent and limitations on selling transaction data), credit assessment and approval processes (to prevent predatory targeting of vulnerable borrowers), and default/collection terms (to avoid debt trap cycles). Required changes may include implementing explicit, separate consent for data sharing, capping late fees, providing clear APR calculations, and incorporating debt counseling resources or opt-out mechanisms for recurring payments.
Entity
Buy-Now-Pay-Later Lenders
Also known as: BNPL Lenders
Industry
Financial ServicesOfficial Press Release
https://portal.ct.gov/ag/press-releases/2022-press-releases/ag-tong-urges-protections-from-buy-now-pay-later-lenders
2022325 cfpb state ag comment letter on bnpl providers 20220
https://portal.ct.gov/-/media/ag/press_releases/2021/2022325-cfpb--state-ag-comment-letter-on-bnpl-providers-20220002-87-fed-reg-3511.pdf?rev=581266f1bd244fe0af7fac119c3f660d&hash=9F43F1613AB9CD38797ABAF7BB658619
Connecticut Attorney General Enforcement Page
https://portal.ct.gov/AG/Privacy/Privacy-Resources
$625K
Connecticut reached a $625,000 settlement with Frontier Communications Parent Inc. over an April 2024 breach in which compromised employee and vendor credentials were used to access internal systems and exfiltrate unencrypted personal information of 58,841 Connecticut residents. The settlement requires Frontier to strengthen its security program, implement specific safeguards and training, and obtain an independent third-party assessment.
$2.6M
Connecticut and New York found that Boston Children’s Health Physicians and its security vendor, XTIUM, failed to use reasonable safeguards, resulting in hackers accessing sensitive personal, medical, and employee information. The companies agreed to pay penalties totaling $2.64 million and implement enhanced cybersecurity measures.
Connecticut joined a coalition of state attorneys general filing a notice in Character Technologies, Inc.’s bankruptcy proceedings, raising concerns about the company’s safety and privacy practices and the sensitive information it holds. The states seek protections for children and consumers if the company’s business or assets are sold or transferred; the filing does not impose a fine or other remedy.
Attorney General William Tong and Consumer Counsel Claire Coleman petitioned PURA to review how Connecticut public utilities use artificial intelligence, citing potential data privacy and cybersecurity risks, algorithmic errors, and misleading outputs. The petition asks PURA to examine utility AI systems, safeguards, vendors, and data security practices; it does not report a finding of violation or an imposed penalty.
$2.0M
Connecticut Attorney General William Tong announced a settlement with RZ Smoke, Inc. over allegations that it distributed and sold high-potency cannabis products without a state license. The stipulated judgment is $2 million, with $375,000 payable to the State and $1.6 million suspended to ensure compliance; the company is barred from specified cannabis activities in Connecticut unless licensed.
$13.7M
Connecticut joined a coalition of states and the federal government in settling allegations that Takeda paid healthcare providers speaker honoraria and provided meals to induce prescriptions of Trintellix, leading to allegedly false claims to government healthcare programs. Takeda agreed to pay $13,670,921 plus accrued interest, with portions allocated to federal and state programs.