Affirm Holdings, Inc.

Ticker: AFRM

Class Period Start: 02/12/2021

Class Period End: 12/15/2021

Registration Deadline: 02/06/2023

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A securities class action has been filed in the USDC – N.D.CA.against Affirm Holdings, Inc. (AFRM) on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Affirm securities between February 12, 2021 through December 15, 2021.  

Affirm operates a platform for digital and mobile-first commerce in the United States and Canada. The Company’s platform includes 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.”

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that:

  • Affirm’s BNPL service facilitated excessive consumer debt, regulatory arbitrage, and data harvesting;
  • the foregoing subjected Affirm to a heightened risk of regulatory scrutiny and enforcement action; and
  • as a result, the Company’s public statements were materially false and misleading at all relevant times.

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 stock price fell $11.74 per share, or 10.58%, to close at $99.24 per share on December 16, 2021.

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