Pomerantz Appointed Lead Counsel in Affirm Holdings Securities Litigation

On March 7, 2023, U.S. District Judge William H. Orrick, of the Northern District of California, appointed Pomerantz LLP as Lead Counsel on behalf of Mark Kusnier – the Lead Plaintiff, and the class, in Kusnier v. Affirm Holdings, Inc., 22-cv-7770 (N.D. Cal.). This securities class action alleges that Affirm Holdings, Inc. (“Affirm” or the “Company”) misled investors regarding the risks and benefits of its services to consumers and the Company’s adherence to consumer protection laws.

Affirm operates a platform for digital and mobile-first commerce in the U.S. and Canada, including point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app.  Particularly, Affirm offers a payment service known as “buy-now, pay-later” (“BNPL”), which allows consumers to purchase a product immediately and pay for it at a later time, usually over a series of installments.  According to the Company, “[u]nlike legacy payment options and our competitors’ product offerings, which charge deferred or compounding interest and unexpected costs, we disclose up-front to consumers exactly what they will owe — no hidden fees, no penalties.”

Allegations against Affirm include that: (i) the Company’s BNPL service facilitated excessive consumer debt, regulatory arbitrage, and data harvesting; and (ii) the foregoing subjected Affirm to a heightened risk of regulatory scrutiny and enforcement action.

On December 16, 2021, the Consumer Financial Protection Bureau (“CFPB”) announced that it had launched an inquiry into Affirm’s BNPL payment service, along with four other companies offering BNPL.  The CFPB indicated that it was concerned about how BNPL leads to “accumulating debt, regulatory arbitrage, and data harvesting,” and is seeking data on the risks and benefits of the products.  In a statement addressing BNPL services, the CFPB Director stated, “[t]he consumer gets the product immediately but gets the debt immediately too.”

On this news, Affirm’s share price fell approximately 10.6%.