‘Criminals love buy now, pay later’: How fraudsters exploit popular interest-free payment plans
Summary
Fraudulent activity is on the rise at some of the largest buy now, pay later (BNPL) platforms in the industry, which include Klarna, Afterpay and Affirm, according to fraud experts who spoke with CNBC. "Criminals love buy now, pay later," Martin Rehak, CEO and co-founder of Czech fraud detection start-up Resistant AI, told CNBC. Criminal gangs are exploiting weaknesses in the application process for BNPL loans, experts say, using clever tactics to slip through undetected and steal items ranging from pizza and booze to video game consoles. Many companies in the industry dont conduct formal credit checks, instead using internal algorithms to determine creditworthiness based on the information they have available to them. Rehak said many scammers are stealing peoples identities or taking over their accounts to evade detection, making unsuspecting victims foot the bill.