By Hannah Lang and Katanga Johnson

WASHINGTON (Reuters). The U.S. Consumer Financial Protection Bureau, (CFPB), asked Thursday five “buy now, pay later” companies about their business practices amid concern that consumers are being put at risk by financing products.

Afterpay Ltd., Klarna (NASDAQ:), Zip Co were all named in the Affirm Holdings and Afterpay Ltd. orders. This was in response to an increase in “buy-now-pay-later” services. These allow users to pay in installments. It is partly due to online shopping’s growth in the aftermath of the coronavirus pandemic.

The CFPB stated that it is worried about data harvesting, regulatory arbitrage, and accumulating debt. It is also seeking information on the product’s risks and benefits.

Rohit Chopra, Director of CFPB said that the consumer receives the product instantly and the debt simultaneously.

Credit Karma, a personal finance firm, conducted a September survey and found that one third of Americans who use “buy-now-pay-later” services are behind in one or more of their payments. 72% said they had seen their credit score decline.

Klarna spokeswoman told Reuters “we believe that proportionate regulation in a positive thing.”

A spokesperson from Affirm explained that the CFPB review was welcomed and supported regulatory efforts that promote transparency and benefit consumers.

Zip, PayPal, and Afterpay did not respond immediately to our requests for comment.

Chopra’s request for information is part of a larger push to curb market abuses in order to increase competition within the consumer finance sector.

Democratic progressives are urging him to resurrect the CFPB following its withdrawal from enforcement and strict policymaking under the Trump administration.

The agency’s action was cheered by banking groups that have long lobbied regulators for greater scrutiny of non-traditional financial institutions.

Richard Hunt of the Washington-based Consumer Bankers Association said, “It is good to see CFPB take the much-needed step towards protecting consumers.”

The request for information on Thursday follows an October CFPB directive requesting data from major tech firms Amazon (NASDAQ), Apple (NASDAQ), Google (NASDAQ), Square, Facebook (NASDAQ), and Meta (NASDAQ), about how they obtain and use consumer payments data.