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01 Sep
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Lawmakers Seek Information on ‘Buy Now, Pay Later’ Gun Sales

Some members of Congress are demanding answers from a small Montana financial firm that has emerged as a major player providing no-interest financing to online gun buyers.

Eighteen Democratic lawmakers want the firm, Credova Financial, to provide information about any safeguards it has in place to make sure guns purchased with “buy now, pay later” financing are not being quickly resold to other buyers. The lawmakers also want to know whether Credova is aware if any of its customers have used guns to commit acts of violence, including several recent “high-profile mass shootings.”

The lawmakers made the request in a letter sent Monday to Dusty Wunderlich, Credova’s chief executive. In the letter, the lawmakers also asked for information about Credova’s financing deals, including details about the percentage of customers who default on their loans.

Credova, a four-year-old start-up in Bozeman, Mont., is one of the few firms offering buy now, pay later financing for purchases of guns and ammunition. Roughly three-quarters of the businesses that Credova has teamed up with are either gun or hunting stores, according to the firm’s website.

The lawmakers said some of the online shops that offered financing from Credova had used “dangerous terminology” to market these deals — with some calling them “shoot now, pay later” or “get protected now, pay later.”

Buy now, pay later firms usually allow consumers to pay for a purchase in three or four monthly payments without charging any interest and are mainly used to pay for goods that cost no more than a few hundred dollars. The financing has become popular in the past few years with younger consumers who either want to avoid credit card debt or can’t get a credit card in the first place.

Most of these financing firms require retailers to pay them a transaction fee to cover the cost of allowing consumers to pay in monthly installments.

The letter to Credova was initiated by five House Democrats who have been active proponents of greater gun safety: Stephen F. Lynch of Massachusetts, John B. Larson of Connecticut, Alma S. Adams of North Carolina, Al Green of Texas and Carolyn B. Maloney of New York. Thirteen more have since signed on.

A lawyer for Credova has said the company does not believe in setting restrictions on the sale of any lawful goods.

Mr. Larson and his colleagues sent the letter to Credova in the aftermath of the deadly mass shootings at an elementary school in Uvalde, Texas; a supermarket in Buffalo; and a July Fourth parade in Highland Park, Ill.

Those shootings led Congress to approve a bipartisan series of modest gun safety measures — the first such bill to become law in nearly three decades. And last month, a congressional committee held a hearing focusing on the role that the manufacturers of assault rifles have played in marketing those weapons to young gun buyers. The hearing by the House Oversight and Reform Committee was led by Ms. Maloney.

Credova has marketed itself to gun buyers at hunting and shooting conferences. More recently, the company has emphasized a partnership with the American Sportfishing Association, in a bid to diversify its business.

Last fall, Credova teamed up with Cornerstone Bank of North Dakota to bolster its financing offerings. The firm also has worked closely with Monterey Financial Services, a California debt collection firm.

In June, Credova announced that it would begin to permit some shoppers to pay for purchases in four no-interest payments. The company also offers a leasing plan in which a customer can avoid paying any interest if a gun purchase is paid off within 90 days. Customers who cannot comply with those terms sometimes wind up paying twice the original purchase of a gun after various fees are added.

In their letter, the lawmakers asked Credova about any late fees it charges customers and complaints it had received from consumers.

The company was given until Sept. 26 to respond in writing.

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