U.S. Senator Richard Blumenthal (D-CT) is warning holiday shoppers to be wary of so-called “buy now, pay later” (BNPL) plans.

He said the companies, such as Klarna and Afterpay, may end up charging customers more than they initially think.

“They advertise no interest,” Blumenthal said. “But in fact, consumers who miss payments or pay late will be slammed with huge fees. The four loan repayments have deadlines. If those deadlines are missed, there are huge fees that may cost consumers much more than ordinary credit would.”

Twenty percent of American consumers used BNPL plans this year, according to Blumenthal.

A proposed rule would have applied the Truth in Lending Act to BNPL companies. It was rescinded by the Trump administration earlier this year.

The rule would have made BNPL subje

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