Why I'll never use Affirm again

Planet Money is looking for people who have had questionable experiences with BNPL providers, I&#x27;d take a look if you haven&#x27;t already: <a href="https:&#x2F;&#x2F;www.npr.org&#x2F;2022&#x2F;02&#x2F;10&#x2F;1079837232&#x2F;have-you-used-buy-now-pay-later-tell-us-how-it-went" rel="nofollow">https:&#x2F;&#x2F;www.npr.org&#x2F;2022&#x2F;02&#x2F;10&#x2F;1079837232&#x2F;have-you-used-buy-...</a>

This is kind of OP&#x27;s fault, right? I don&#x27;t think it was appropriate to initiate a charge back on a payment to affirm since they provided their service to OP, that is they already paid for whatever OP was buying. I have a feeling that timing between OP opening the chargeback and the shipping of the item was actually coincidental.<p>I&#x27;d think if you paid affirm and the merchant hadn&#x27;t shipped the item, then your recourse would be to go to Affirm, not your credit card you used to pay affirm.

Hi, I am the CEO at Affirm. I am sorry for the bad experience you appear to have had with our customer support — it is certainly not what we strive for.<p>Please email me at max.levchin @ affirm.com with either the transaction ID or the email address you used to register, and I will track down exactly what happened here. I realize you may not care at this point, but I’d greatly appreciate it, as it will help us prevent poor customer experiences.<p>Thank you. —Max

There&#x27;s a misconception that when you initiate a chargeback through your credit card, then you&#x27;re good, you have your money and the merchant just has to eat it.<p>But the chargeback doesn&#x27;t erase your debt with the merchant, so they are free to collect that debt by other means, including sending it to a debt collector.<p>Adding a third party like Affirm makes this messier - Affirm (presumably) fulfilled their service, they let you finance the debt and they paid the money to the merchant

Is it normal to do a chargeback against a loan provider? I was under the impression that it’s more for “services rendered” type of situations — which the lender fulfilled by providing the loan. I would expect there to be pure chaos if I did that to any of my lenders. I’ve just never heard of this sort of situation so I’m curious as to what the financial wisdom is.

One point not brought up is that Chase may not be an honest broker here. I&#x27;ve seen both sides of a &quot;charge back&quot; that had the bank lying to both parties while soaking up a bunch of fees. Telling the customer that it had been resolved in the company&#x27;s favor while telling the company that it had been resolved in the customer&#x27;s favor. Taking both the funds and fees for themselves.<p>Affirm might well be correct that the bank has not really resolved the chargeback despite what Chase is telling him.

The lead is generous. Affirm is charging you for a loan you&#x27;ve already paid and threatening you with late payment. This should be criminal.

By a very cursory reading, if Affirm sends a negative report to a credit reporting agency, under the Fair Credit Reporting Act, they may be liable for damages and attorney’s fees.<p>I would suggest writing a letter to Affirm’s legal department describing, very calmly, that Affirm has, apparently knowingly, threatened to send a report to a credit reporting agency despite the fact that Affirm is aware that no actual unpaid debt exists, and that, should this actually occur, you may seek to recover damages under the FCRA.

I&#x27;ve never understood the appeal of using a product like Affirm, especially if you already have a credit card.<p>Credit cards already give you a 30-day grace period before purchases start accruing interest. Using Affirm to extend that to 42 days seems inconsequential.<p>It seems like their target customer are people bad with credit, which would make them predatory.

This is so strange. If Affirm is the creditor why does he not ask Affirm to initiate a chargeback against the merchant? Is this one way Affirm can compete against credit cards, that they do not need to handle this kind of situation?

I used to find solace in the fact I could call a company and get to someone who can resolve my issue. These days I feel like it&#x27;s impossible to get to a human, let alone one with any power, without jumping through hoops. It makes me hesitate to put trust into new products&#x2F;services.

I worked at a large OTA (Online Travel Agency) who adopted Affirm a few years back. I vehemently opposed it and told everyone I could up the chain of command. A vast majority of the folks who used it, are the ones who shouldn&#x27;t use it. Taking out a two year loan for a 3 day vacation.

Can someone explain to me, i live in a country that doesn&#x27;t have credit scores, limits loans rates to something sane, why you would use a predatory payment lender that will balloon? Seems like a very high risk gamble especially if you have the money and even higher gamble if you do not have the ability to pay a loan.

<i>My next steps are to file a complaint with the NY State Attorney General&#x27;s office.</i><p>This is a right approach. I wish more people know about this.

All these SV fintechs are horrible at customer service. At the very top of that list is Paypal and SoFi. If you want to be in a consumer facing business, we need to force these guys to have min level customer service staff based on number of accounts.

As someone that never goes in debt and would never use Affirm, I still realize these types of services will impact me.<p>Just like with high cashback credit cards, they have large merchant comissions, that in the end have to be covered from the other customers to show only a single price.<p>I end up subsidizing other customers by a tiny amount, and just wish for regulation to stop this micro-theft.

Rule of thumb on chargebacks: Only do them against a vendor you never intend to ever do business with ever again. A lot of companies, especially tech companies, will go absolutely <i>postal</i> if you chargeback them.<p>Chargebacks against Google can cause your Gmail to get banned, chargebacks against Valve can cost you your entire Steam library. It&#x27;s plausible legal action could reverse these behaviors, but unless you&#x27;re prepared and funded to go that route, <i>don&#x27;t do chargebacks</i>.

I understand the mathematical argument for using these BNPL services, but I wish that we as a society were not so comfortable with debt that some are willing to incur it on a pair of shoes or a fashionable t-shirt. Personally, it gives me the heebie-jeebies.

I work on payments related systems. At Amazon, this meant connecting to banks and being dependent on them. At Snap, we use payment processors to facilitate things relating to payments.<p>What I&#x27;ve learned is that the U.S. payments infrastructure is quite far behind, it&#x27;s complicated, and frankly makes building with it more difficult than it should be.<p>For example. There&#x27;s this new (as of like 2017 iirc) payment rail called Real Time Payments. Think &quot;ACH transfer&quot; but in &lt;10 minutes 24&#x2F;7 instead of 3-5 business days.<p>It&#x27;s advertised as 24&#x2F;7 however banks are actually allowed to go offline from 3am - 6am on Sundays (it may be once a month, memory is a bit fuzzy). So if you initiate a payment to a payee who&#x27;s bank is offline, the payment is &quot;rejected&quot;. So now you have to tell your customer &quot;hey sorry, the payment has been rejected, it&#x27;s not actually going to be available for a few hours&quot;.<p>Also there&#x27;s no centralized way to tell when banks are down and as far as I know, there was no system built to track which banks are down and which are not. So if you want to avoid sending payments to a bank that&#x27;s offline, you need to look at the history of payments to see for recent reject codes, have a direct line of communication with the banks, or use a third party API which probably does one of the prior mentioned things.<p>There&#x27;s also some fun (sarcasm) edge cases in the state machine for a payment and there&#x27;s a state of payments where it&#x27;s said to be completed but actually the payment is in limbo and hasn&#x27;t been received.<p>Remember, this is a payment system that was released in the last 5-10 years. Also, only ~70% of banks are onboarded to this payment rail so you have to look at payment destination routing numbers to validate if it&#x27;s an option or not.<p>I mention all of this to try and convey the complexity and difficulty of working with the U.S. payment rails directly. I don&#x27;t know if charges applies in the same manner, but I bet it&#x27;s just as complicated.<p>With that said, this is Affirms bread and butter for their business. They should be aware of these things. Build the tools to enable their support team to do their jobs and help customers.<p>p.s. can&#x27;t forget that ACH transfers are built to be done in batches for business hours only. That&#x27;s a whole other topic.

I bought two items on Affirm from the same merchant and they both were defective. I paid using a bank account, affirm will do nothing for me on the items.

I always thought that &quot;Affirm&quot; was a scam. Glad I never went in for one of their plans.

Affirms big selling point, other than offering the checkout flow credit option which reduces bounce rates, is that they have &quot;better&quot; ways of determining if someone can be lended to. Even if a consumer can&#x27;t qualify for a credit card, Affirm will still cut them a loan.<p>How true that second claim is and whether Affirm is merely yet another predatory lender, I will leave as an exercise to the reader.<p>Here&#x27;s a good deep dive on the BNPL model from Bits About Money: <a href="https:&#x2F;&#x2F;bam.kalzumeus.com&#x2F;archive&#x2F;buy-now-pay-later&#x2F;" rel="nofollow">https:&#x2F;&#x2F;bam.kalzumeus.com&#x2F;archive&#x2F;buy-now-pay-later&#x2F;</a>

I tried using Affirm once. Apparently the underwriter was &quot;unable to confirm my identity&quot; using my Experian data so I was denied. My credit history is extensive and includes 10+ years of data. So it&#x27;s not for the lack of credit history. I tried their competitor (Klarna) as well. Their system worked just fine but it was only for $1000. Apparently they have some internal scoring system outside of FICO that helps to determine how much they will loan out. Ended up just foregoing the BNPL process and paying for it directly.<p>Kind of glad I was denied now.

It&#x27;s long past time for credit reporting companies to lose their legal shield against libel.

I don&#x27;t view this situation as unique to Affirm in any way shape or form. I had a very similar situation with a chargeback scenario with my Apple card with fraudulent in-app purchases. The support infrastructure between bank - middleman - creditor is broken everywhere, and this is Apple and Goldman Sachs we are talking about.

I almost used Affirm the other day because deferring payments at 0% is attractive, but then I realized it would result in a hard credit inquiry, equivalent to opening a new line of credit. (Which it sort of is, but why defer $200 when you could open a real credit card and get introductory 0% for 18 months on potentially $10k or more instead? Even if you only spend $200 on your new credit card, presumably this is better for your credit score as you would be using a tiny fraction of the available credit on that account.)

Getting a loan for such a small amount and for an online transaction, sounds like a poor decision. I honestly don&#x27;t understand people using these tools, they seem a recipe for disaster. When I didn&#x27;t have money to purchase the things I wanted I saved and then purchased the item, I didn&#x27;t get a loan.<p>A chargeback to Affirm sounds like a bureaucracy nightmare, couldn&#x27;t the op contact Affirm and get them to chargeback the merchant? Do they have a procedure for this?<p>That said, Affirm exhibited terrible customer support and for that they should be held accountable.

Fintechs are just neo banks, but with far worse customer service, far less supervision, and tech company valuations. BNPL companies are especially in for a reckoning as sanity slowly returns to markets.

OP may not realize how bad the dispute process is with banks.<p>When a merchant gets a charge disputed, they may not know about the dispute for many days. Then, if the customer lifts the dispute, the banks most often continue to hold the funds, and not release any information to the merchant for 90 days.<p>It&#x27;s horrible for merchants and customers.

Worth bearing in mind that the smooth operation of society depends on not just rules and processes, but also the goodwill, agency, and common sense of humans within it. Where such things are degraded, through politicisation, bad education, or simply rubbish food, then that society will begin to fail.

Don’t mess with finance companies,<p>I worked at one indirectly that was part of a major bank.<p>They used to even have local branches (stores in Wells Fargo parlance).<p>Citi, Wells, etc so had them back in the day before they were shamed into shutting them down.<p>Financing small purchases is just bad financial hygiene.

&gt; tldr: I&#x27;ll never use Affirm again because when there are issues with their payment system that could severely impact your credit score for years, their customer support is unequipped to help and their underlying support infrastructure is poorly designed.<p>The story of pretty much EVERY startup. What will it take to get these clowns to focus on customer service and properly build out infrastructure? How much is enough fintech recklessness?

I have no idea what an <i>Affirm</i> is supposed to be; would people please include some context or otherwise try to be helpful when they post service complaints?

Reading stuff like this makes me think that Elizabeth Holmes would have been fine if she weren&#x27;t in a regulated space that tied into people&#x27;s health.

+1 to this. Thanks for the heads up.<p>I had a similar experience years ago with Comcast&#x2F;Xfinity and found many others who did too since. (&#x2F;VIN-DI-CATION!)

Not victim blaming. Do not do payments. You either have the money or you don&#x27;t. Save your money, buy it when you have it fully.

Misread as Affrin and expected story about nasal spray addiction.

Who takes a loan for a $271 purchase?

Does Affirm actually report to the credit bureaus? It&#x27;s my understanding that they do not, but perhaps I am misinformed.

This seems like fraud

I feel like all these online &quot;buy now pay later&quot; services are just there to prey on poor people

&quot;I&#x27;m fortunate to be in a financial position where damage to my credit score wouldn&#x27;t be the end of the world..&quot;<p>Then why did you bother using a pay later scheme for a few hundred dollars on some sketch retailer?<p>This is like the person that chose to walk down a dark alley in a large unfamiliar city and can&#x27;t believe they got mugged.

Predatory loans from Silicon Valley.. It&#x27;s evil at scale!!!

But the developers got all their tickets closed this sprint. Because at the end of the day, ticking boxes is what matters, not actually providing business value. Just ask your scrum &quot;master&quot;.

Sounds like the only harm done to you is some unpleasant emails, and some phone calls that were also rather unpleasant that you initiated. Their automated systems and support seem rather terrible(unfortunately normal). You might have just sent these bad automated emails to your spam folder and been just fine.<p>Everything else is based on some imagined harm that might or might not come to you or some other imaginary person at some point in the future.<p>I used to get worked up about stuff like this but now I ignore it and my credit is pretty much perfect still. My mental state is much improved.<p>I might be not understanding the situation completely though.