unlawfulcharges.comWhat Sezzle charges when a payment goes wrong
Sezzle Inc. offers buy now, pay later plans that split a purchase into installments, typically paid every two weeks. Sezzle's published fee schedule, effective August 14, 2026, lists these charges:
- Late Payment Fee: up to $16.95, but no more than 25% of the purchase order amount, charged when a payment is not made within the grace period.
- Failed Payment Fee: up to $6.95, also capped at 25% of the order, charged when a payment Sezzle tries to process fails, such as for insufficient funds.
- Reschedule Fee: up to $7.50 to push a payment back by up to two weeks.
- Late Saver Fee: $1.99 if a bank account is not your default payment method and you do not make the payment yourself by the due date.
Sezzle also sells monthly subscriptions: Sezzle Premium at $13.99 a month and Sezzle Anywhere at $19.99 a month. The fee schedule says that depending on state law, a fee "may be smaller or not assessed at all."
Why a capped fee can still be the whole payment
A cap of 25% of the purchase order sounds like a limit. But on a pay-in-4 plan, each installment is itself 25% of the order. That means the late fee can be as large as the entire payment you missed.
Take a $60 order split into four payments of $15. If one payment is late, the fee schedule allows a late fee of up to $15, the same amount as the payment. On Sezzle's pay-in-5 plans, where each installment is 20% of the order, the late fee can be larger than the payment that was late: on a $60 order, a $12 payment can draw a fee of up to $15.
Reschedule fees work the same way. Paying $7.50 to move a $15 payment back two weeks costs half the payment for a short delay. Because the schedule lists late, failed-payment and reschedule fees separately, more than one can land on the same small purchase.
What the law allows
A lender is allowed to charge a reasonable fee when a payment is late. It is not allowed to charge whatever it wants. Many states limit the late and default charges on small consumer installment loans, often to a few dollars or a small percentage of the payment that was late. A late fee equal to the whole missed payment may exceed those limits.
The law also generally does not allow a fee for a late payment to serve as a penalty that is far out of proportion to what the late payment actually cost the lender. And state consumer-protection laws prohibit unfair fee practices that consumers cannot reasonably avoid.
Separately, federal law requires a company to stop automatic debits once you revoke your authorization. If Sezzle kept charging your card or bank account after you tried to remove it or stop automatic payments, that may be a separate claim.
Who may qualify, and what you could recover
You may have a claim if you used Sezzle and were charged a late fee, a failed payment fee or a reschedule fee within the last four years. People charged several fees on small purchases are especially likely to qualify. Your Sezzle app shows each order, each payment and each fee, and your bank statements show what was debited.
A claim seeks to recover the fees you paid that went beyond what the law allows, plus statutory damages where state law provides them. Where a company kept debiting an account after authorization was revoked, federal law provides additional statutory damages. Maginnis Howard pursues these claims for consumers individually, and you pay no fee unless money is recovered for you. The short questionnaire on this page is the first step.
The legal basis
Why this may be illegal
Sezzle lets shoppers split a purchase into installment payments, but its fee schedule ties the late fee to the size of the whole order rather than the payment that was late. The late fee can run up to $16.95, capped at 25% of the order. Each pay-in-4 installment is itself 25% of the order, so on a small purchase a single late payment can cost as much as the payment itself. Sezzle also charges up to $6.95 when a payment fails, up to $7.50 to reschedule a payment by two weeks, and $1.99 when a bank account is not the default payment method. These fees can stack on one small purchase and may exceed what state law allows for a late payment on a small consumer loan.
The law
Many states limit the late and default charges a lender may impose on small consumer installment loans, often to a few dollars or a small percentage of the late payment. The law generally does not allow a late fee to function as a penalty far out of proportion to the lender's actual cost. The unfair and deceptive practices laws of all 50 states prohibit fee practices consumers cannot reasonably avoid. Federal law also requires a company to stop automatic debits once a consumer revokes authorization.
What you could recover
Per-claimant actual damages = the sum of every late fee, failed or returned payment fee, reschedule fee and similar penalty fee charged on the claimant's buy now, pay later purchases. Where a fee exceeded the limit the claimant's state law sets for late or default charges on small consumer installment loans, damages include recovery of the excess and, in some states, statutory penalties. Where a fee was so far out of proportion to the lender's actual cost of a late payment that it operates as a penalty, damages include recovery of the fee. State consumer-protection statutes add statutory damages that vary by state (roughly $100 to $10,000 per violation, with enhanced or tripled damages in some states for willful conduct). Where the company kept debiting a card or bank account after the claimant revoked authorization, federal law adds statutory damages of $100 to $1,000 per claimant, plus the unauthorized debits. Attorney fees are recoverable under many state statutes and the federal electronic-payments law. Typical individual claim range: $100–$3,000, depending on the number of fees, the claimant's state, and whether unauthorized debits occurred.
How your claim would be handled
Claims like this are handled as individual arbitration cases — private proceedings, no courtroom. For Sezzle Inc., cases are typically administered through JAMS.
The Plan, As Advertised* vs. What the Plan Actually Cost*
| The Plan, As Advertised* ($60 order split into 4 payments · $15 every 2 weeks) | $60.00 |
| Late fee on one missed $15 payment (up to 25% of the order) | +$15.00 |
| Fee to push another payment back two weeks | +$7.50 |
| What the Plan Actually Cost* (Late, failed-payment and reschedule fees can add up to a large share of a small purchase) | $82.50 |
Figures shown are illustrative examples, not records of an actual transaction; your amounts may differ.
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Check if you qualifyFrequently asked questions
Do I have to pay for this?
You don't pay anything unless we recover compensation on your behalf. Our legal team works on contingency, which means we only get paid if you do.
I did pay late. Do I still have a claim?
Possibly. A lender can charge a late fee, but the law limits how much. The question is whether the fees you were charged were larger than the law allows or out of proportion to the payment that was late.
What if I was charged more than one fee for the same missed payment?
Tell us in the questionnaire. Several fees stacked on one small purchase are a central part of what this investigation is looking at.
Do I need to still use the app?
No. Both current and former users who were charged these fees within the last four years may qualify.
What is Maginnis Howard?
Maginnis Howard is a consumer protection and personal injury law firm serving clients nationwide. You may find more details about us at www.carolinalaw.com.
What clients say
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