In late summer, a delivery service dropped off two packages containing $5,000 in gun parts and accessories at a house in Chino Hills, a community in Southern California.
The packages, containing parts for a Glock handgun, an AR-15-style rifle and other weapons, had been shipped from Primary Arms, a gun seller in Houston. The components were purchased in August using an installment payment plan provided by Credova Financial, a company that specializes in “buy now, pay later” financing options for firearm purchases.
The deliveries were addressed to Seung Song.
Except, Mr. Song said, he never ordered the mix of gun parts, and he never got any delivery. A recently retired engineer, Mr. Song said he had found out about the purchase only when notified in October that a debt for $5,000 had been added to his credit report. When he reviewed the report, he saw that Monterey Financial Services, a debt collector used by Credova, had reported that the debt was overdue.
“I never heard of any of these companies,” said Mr. Song, 52. “I am not a gun owner.”
Mr. Song, who lives in a condominium apartment in Southern California with his wife, said he was the victim of identity theft. He said someone had opened an account with Credova using his personal information, bought the gun parts online from Primary Arms using the company’s buy now, pay later service, and then accepted delivery of the packages in Chino Hills — which is about 40 miles east of Los Angeles — with a fraudulent ID.
It was unclear whether the events happened exactly in this way, but the Los Angeles Police Department’s commercial crimes division recently opened an investigation after Mr. Song filed a complaint and disputed the charge. A law enforcement official said the police concluded the gun parts had been legally shipped to a house in Chino Hills and considered both Mr. Song and Credova as potential victims.
Mr. Song’s ordeal highlights a rising trend of identity theft involving the fast-growing buy now, pay later industry and the added danger that can occur when the items being purchased online are something like gun parts as opposed to shoes or cosmetics.
The buy now, pay later industry, which boasts that companies can safely approve an online credit application within minutes, is susceptible to purchases made with stolen identities. A study published in June by a division of Refinitiv found that 23 percent of Americans who said they were victims of identity theft said their information had been used to open an account with a buy now, pay later service.
“Buy now, pay later has been a popular target for fraudsters,” said Jordan McKee, a research director for financial technology companies at S&P Global Market Intelligence.
Mr. McKee said that in a bid to gain market share, firms offering a buy now, pay later option “have been loose with their underwriting process” when approving customer applications.
Credova, a five-year-old financial technology company in Bozeman, Mont., said in a statement it had a “multilayered fraud and identity verification structure” to root out potential cases of fraud.
The company declined to comment on Mr. Song’s situation, citing customer privacy concerns, but it said in a statement that it was “actively working with law enforcement to hold any wrongdoers accountable” and had “less than .0002 percent confirmed fraud rate.”
Buy now, pay later options allow customers to make payments in monthly installments and avoid most charges if the bill is paid off within a set period — typically 90 or 120 days. The industry has grown exponentially, but the biggest players, including Affirm, Afterpay and Klarna, don’t finance firearm purchases. Credova is one of the few buy now, pay later companies that does provide financing to customers of gun and hunting shops.
Under federal law, an individual who orders a firearm online has to pick it up in person from a licensed gun dealer after a background check. But since many gun parts and ammunition are not considered critical to making a gun operational, a licensed gun retailer can lawfully ship them to a private residence.
When Mr. Song disputed the charge on his credit report, he requested a copy of the installment loan agreement that Credova had approved, which included an itemized purchase list for 28 different gun parts ordered from Primary Arms.
Gun enthusiasts sometimes buy components to augment their existing firearms. But gun control advocates said large caches of gun parts could be used to construct privately made firearms — sometimes called ghost guns because they were hard for law enforcement to trace.
Adam Skaggs, chief counsel and policy director for Giffords Law Center, an advocacy group for the prevention of gun violence, who reviewed the Credova contract, said all of the gun parts on the list could be legally shipped to a person’s home. Someone with the right knowledge, Mr. Skaggs said, could use those parts to build a functional gun as long as the person had access to other critical gun components — such as a nearly finished frame or lower receiver.
Frames and lower receivers are the parts of guns that enable them to fire. Many gun retailers will not ship those components to a private home, and a new federal rule requires buyers to pick up some frames and receivers at licensed gun shops.
Marshall Lerner, the chief executive of Primary Arms, said in a statement that the company had complied with all regulations. He said a person had signed for the goods and the delivery person also scanned an ID. He said both matched the name on the loan application.
Mr. Song, who has lived in the United States for nearly three decades, said he disputed the charge as soon as he saw it on his credit report. At Credova’s request, he provided the company with photographs of his driver’s license, social security card and a utility bill. He retained a lawyer after he became frustrated with the slow response from Monterey and Credova.
“I was really worried about them coming to collect on me,” said Mr. Song.
Mr. Song said he had never made any payments under the contract, and he had never been to Chino Hills. “All of my wife and my relatives and family live in Korea, and none of my friends live in Chino Hills,” he said.
Then in mid-December, Monterey informed him it had closed his account with Credova. Mr. Song thought the matter was over. But last month, in a statement to The Times, Monterey said it would be “false” to report that the debt collector had concluded that the transaction was fraudulent.
“It makes me frustrated,” Mr. Song said. “I have already provided them so much of my personal information.”
Susan C. Beachy contributed research.
