---
title: The Buy Now, Pay Later Compliance Checklist
description: A checklist of items that BNPL lenders should keep in mind when crafting their compliance programs across marketing, merchant services, & customer service
---
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Compliance Checklist
# The Buy Now, Pay Later Compliance Checklist
For Buy Now, Pay Later (BNPL) lenders, compliance requirements across your marketing programs can be tricky to navigate. Regulations governing industry lending are complex, broad, and oftentimes ambiguous—designed to protect consumers by covering a wide range of potentially deceptive or abusive acts and practices.
So, how can you ensure that your brand and merchant partners are compliant? We’ve compiled a checklist of the top items that Buy Now, Pay Later lenders should remember when crafting their compliance programs.
## Industry-Specific Regulations
In May 2024, the Consumer Financial Protection Bureau (CFPB) issued an interpretive [rule](https://www.consumerfinance.gov/rules-policy/notice-opportunities-comment/open-notices/use-of-digital-user-accounts-to-access-buy-now-pay-later-loans/) confirming that BNPL products will be regulated the same as credit cards under the Truth in Lending Act (TILA).
**Some specific requirements include:**
**Investigation disputes:** Lenders must investigate disputes that consumers initiate, pause payment requirements during the investigation, and issue credits if necessary
**Refunding returned products or canceled services:** When consumers return products or cancel services for a refund, lenders must credit the refunds to consumers’ accounts
**Providing billing statements:** Consumers must receive periodic billing statements like those for classic credit card accounts
## Advertising and Promotions
As part of your compliance program, you want to monitor your company’s marketing activities across all mediums. This includes your own marketing communications (across the web, calls, emails, messages, documents, social media, etc), third party pages, external blogs, and review sites for any instances of brand infringement or noncompliance with regulatory requirements.
**Below are some items to consider to ensure compliant marketing materials and communications.**
#### Clear and Transparent Terms
**Display Terms Clearly:** All marketing materials, including brochures, web pages, social media posts, and merchant promotions, must clearly display the full terms and conditions of the BNPL product
**Use Plain Language:** Use plain language that is easily understandable by the average consumer. Avoid jargon and complex legal terms
**Prominent Disclosures:** Ensure that key information is prominently disclosed and not buried in fine print. This includes important terms like interest rates (if any), late fees, and total repayment amount
#### Accurate and Substantiated Claims
**Make Truthful Claims:** All promotional claims must be truthful and substantiated with clear evidence
**Avoid Deceptive Practices:** Avoid terms like "free" or "no-cost" if any associated fees or conditions exist. Ensure promotional offers clearly state any limitations or condition
#### Mandatory Disclosures
**Before the consumer completes the transaction, make sure the following information is shared clearly and conspicuously:**
Total purchase cost
The amount and due date of each installment payment
Any potential fees, including late fees and re-presentment fees
Credit reporting impact
Full copy of terms and conditions
## Consumer Complaint Management
#### Complaint Management
**Complaint Identification:** Have a system in place to quickly identify consumer complaints submitted directly to your organization, across social media platforms, and to regulators (like the Consumer Financial Protection Bureau)
**Accessible Support for Consumers:** Establish a clear and accessible procedure for handling consumer complaints. Provide multiple contact methods (e.g., phone, email, online form) and ensure these are prominently displayed in appropriate marketing materials
**Timely Acknowledgements:** Handle complaints promptly and provide written acknowledgments to consumers in a timely manner
## Merchant Monitoring
#### Due Diligence
When it comes to choosing new merchants to work with, you should have a process for vetting them before deciding to do business with them.
**When carrying out your due diligence, here are some things to consider checking:**
**Business History:** Financial health, operational capabilities, and reputation in the industry
**Customer Feedback:** Customer reviews and ratings to gauge merchant’s service quality
**Regulatory Compliance:** Ensure the merchant has processes in place to comply with relevant laws and regulations, including consumer protection and data privacy laws
**Enforcement Actions:** Check if the merchant was involved in any previous enforcement actions or lawsuits
**Website:** Ensure the merchant’s website is legitimate
**Social Media Presence:** Make sure the merchant is posting appropriate content and advertising what they sell (i.e. not selling any items prohibited by your brand)
#### Ongoing Monitoring
Once your merchants go live, continuously monitor their marketing content to ensure they’re abiding by appropriate rules, regulations, and guidelines.
Adherence to brand guidelines
Not selling prohibited products on their sites
Compliance with applicable regulations (TILA, UDAAP, etc.)
Prohibited language, like “instant approval,” “same as cash,” or “no credit needed”
## Monitoring + Auditing
**A system in place to monitor for compliance across the multiple marketing channels and platforms, including (but not limited to):**
Merchant websites and promotions
Email marketing campaigns
Social media platforms (Facebook, X, LinkedIn, TikTok, YouTube, etc.)
Paid search advertising (Google Ads, Bing Ads, etc.)
Display advertising (banner ads, pop-ups, etc.)
Direct mail campaigns
Messaging channels (SMS, messages, chat boxes, push notifications, etc)
Affiliate marketing programs
Referral marketing program
## Enforcement + Remediation
**Have a clear action plan for non-compliance by an employee, merchant, partner, or third party. This may include:**
Notifying the individual of the violation
Removal or remediation of non-compliant content
Documenting instances of non-compliance and remediation
Determining appropriate disciplinary actions for individuals or third parties who repeatedly engage in non-compliant behavior
## Technology
**Implement a marketing compliance software or tool to help monitor activity and ensure compliance with regulations that includes:**
Automatic discovery and ongoing monitoring across marketing channels, merchants, and third parties
Ready-to-use and expert-built rulebooks designed to identify potential compliance violations to monitor content against
A centralized workflow that tracks activities across both internal departments and external partners, merchants, or third parties
Detailed reporting and analytics for compliance and performance
Archived history from discovery through remediation for any audit situation
Opportunity for scale that makes it easy to add additional marketing channels for review and monitoring
## Kick-start your Buy Now, Pay Later compliance program with experience.
With deep industry experience, PerformLine equips BNPL companies with a comprehensive compliance platform to navigate a complex industry and consumer protection regulations. Through machine learning, predictive analytics, and years of experience with regulators and clients in highly regulated industries, our platform is the backbone of many leading Buy Now, Pay Later compliance programs.
Your business moves fast. Make sure your compliance program moves in sync with it using PerformLine's comprehensive, flexible, and scalable technology.
### Get complete compliance coverage with PerformLine
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