The Afterpay lawsuit landscape spans four distinct fronts: consumer class actions in California and Maine accusing the buy-now-pay-later company of hiding the overdraft risk of its automatic deductions, a 2020 California enforcement settlement over unlicensed lending, a securities fraud case against parent company Block tied to its 2022 acquisition of Afterpay, and a multistate attorney general inquiry opened in December 2025. None of the private cases has produced a public ruling as of early 2026, and federal enforcement has receded, leaving state regulators as the most active watchdogs.
Consumer Class Actions Over Overdraft and NSF Fees
Two putative class actions drive the consumer side of the litigation. Both argue that Afterpay’s marketing conceals a predictable consequence of its automatic repayment model: when a scheduled deduction hits a bank account without enough money in it, the customer’s bank charges an overdraft or non-sufficient-funds fee.
The first case, Miller v. Afterpay US (Case No. 4:21-cv-04032-DMR), was filed May 27, 2021, in the U.S. District Court for the Northern District of California.1ClassAction.org. Miller v. Afterpay US Complaint The complaint alleges Afterpay markets itself as “convenient, simple, automatic, and free” while omitting that its automatic deductions routinely trigger third-party bank fees, and that “no reasonable consumer would run this risk” if properly informed.2The Sydney Morning Herald. US Class Action Against Afterpay Exposes the Hidden Cost of BNPL
Less than a year later, Edwards v. Afterpay US, Inc. (Case No. 2:22-cv-00118-JDL) was filed April 27, 2022, in the U.S. District Court for the District of Maine.3Truth in Advertising. Edwards v. Afterpay Complaint Plaintiff Amanda Edwards brought parallel claims under the Maine Unfair Trade Practices Act. The proposed class covers all U.S. users who incurred an overdraft or NSF fee as a result of an Afterpay repayment deduction.4Top Class Actions. Afterpay Class Action Claims Buy Now Pay Later Charges Significant Fees
Neither case has publicly reached class certification or trial. A likely reason: Afterpay’s terms of service require binding individual arbitration in San Francisco County and include a class-action waiver.5Afterpay. Terms of Service Users can opt out by written notice within 30 days of their last order, but the window is narrow and rarely used.6Afterpay. Installment Agreement Afterpay itself does charge late fees, which NBC News reported can reach “$8 or 25 percent of the order amount.”7NBC News. Hidden Costs of Buy Now, Pay Later Loans
California’s 2020 Enforcement Settlement
Before the private class actions, Afterpay had already settled a state enforcement matter. On March 16, 2020, the California Department of Business Oversight, now the Department of Financial Protection and Innovation, issued a consent order finding Afterpay had operated as a finance lender in California without a license, in violation of Financial Code section 22100.8California DFPI. Afterpay Consent Order
The order required Afterpay to refund or credit $905,362.78 in late fees to California residents and pay a $90,536 administrative fee. Afterpay was also directed to conduct California lending activity going forward only through its licensed subsidiary, Afterpay US Services, LLC. California was, at that point, the only state treating BNPL loans as lines of credit, according to NBC News.7NBC News. Hidden Costs of Buy Now, Pay Later Loans
Securities Fraud Case Against Block Over the Acquisition
Block, Inc. completed its acquisition of Afterpay on January 31, 2022, in an all-stock deal originally announced in August 2021 at roughly $29 billion.9Block, Inc. Afterpay Acquisition Press Release10Square. Square Announces Plans to Acquire Afterpay A shareholder class action covering the period November 4, 2021, through April 4, 2022, alleges Block made material misrepresentations and omissions in connection with the merger that artificially inflated the price of Block securities.
One central allegation is that Block sold approximately 113 million unregistered shares to former Afterpay shareholders, falsely claiming the shares were exempt from SEC registration under Section 3(a)(10) of the Securities Act.11Robbins LLP. Block, Inc. Shareholder Class Action The complaint asserts violations of Sections 5(a) and 5(c) of the Securities Act and scheme-liability claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.12BusinessWire. Johnson Fistel Regarding Block/Afterpay Class Action
The case gained fuel on March 23, 2023, when Hindenburg Research published a short-seller report characterizing the Afterpay acquisition as “flopping,” noting Afterpay delinquencies had more than doubled to 4.1% by March 2022 and that the combined entity reported a $357 million loss for the year.13Hindenburg Research. Block: A Short Seller’s Report Block’s stock fell nearly 22% in the days that followed, and Block called the report “factually inaccurate and misleading.”14CNBC. Block Shares Plunge After Hindenburg Report
Federal Complaint Volume Without Federal Action
By early 2023, the Federal Trade Commission had 1,231 consumer complaints about Afterpay on file, according to records Forbes obtained through a Freedom of Information Act request. Common themes included difficulty reaching customer service (the company had no phone number for support), refund problems, unauthorized transactions, and retailer disputes.15Forbes. Frustrated Consumer Complaints Filed With the FTC About Afterpay Hundreds more complaints reached the Consumer Financial Protection Bureau and the Better Business Bureau, often about being charged for returned items or being unable to obtain refunds.7NBC News. Hidden Costs of Buy Now, Pay Later Loans Neither the FTC nor the CFPB has publicly initiated formal enforcement against Afterpay.
The 2025 Multistate Attorney General Inquiry
The regulatory picture shifted sharply in 2025. On May 12, 2025, the CFPB withdrew its 2024 interpretive rule that had classified certain BNPL providers as “credit card issuers” and “creditors” under the Truth in Lending Act, and said it would no longer prioritize BNPL enforcement, describing the earlier approach as relying on “novel legal theories.”16Consumer Financial Protection Bureau. Buy Now, Pay Later Products
States moved to fill the space. On December 1, 2025, attorneys general from California, Connecticut, Colorado, Illinois, Minnesota, North Carolina, and Wisconsin launched a formal inquiry into the six largest BNPL providers, Afterpay among them.17North Carolina Department of Justice. Attorney General Jeff Jackson Leads Inquiry Into Buy Now Pay Later Lenders Led by North Carolina Attorney General Jeff Jackson and Connecticut Attorney General William Tong, the coalition sent letters demanding information on underwriting practices, billing and late fees, how disputed charges are handled, and what protections U.S. consumers receive compared with users in overseas markets.18Connecticut Attorney General. Attorney General Tong Launches Inquiry Into Buy Now Pay Later Lenders
“Laws exist to protect North Carolinians from predatory lenders, and we are going to make sure these lenders are following the law,” Jackson said.17North Carolina Department of Justice. Attorney General Jeff Jackson Leads Inquiry Into Buy Now Pay Later Lenders The California Attorney General’s office linked the inquiry directly to the CFPB’s May 2025 withdrawal of the interpretive rule.19California Attorney General. Borrow Now, Pay Later: Attorney General Bonta Has Questions
Congress applied its own pressure. In November 2025, five senators led by Elizabeth Warren sent Afterpay a letter demanding detailed data on its fee structure, late-fee revenue, and consumer complaints, and asking whether the company would continue voluntary compliance with the Truth in Lending Act after the CFPB’s retreat.20U.S. Senate Banking Committee. Letter to Afterpay Regarding BNPL Practices
Where Things Stand
As of early 2026, every major matter against Afterpay remains open. The Miller and Edwards consumer class actions are still on their respective dockets without publicly reported resolutions, and Afterpay’s arbitration clause remains a live obstacle to class treatment. The securities fraud case against Block has no reported outcome. The multistate attorney general inquiry is in its early information-gathering phase, and Congressional demands for Afterpay’s fee data remain outstanding. The California 2020 consent order is the only completed enforcement action of the group, and its terms bind only Afterpay’s California operations.