Norway’s Consumer Council has referred Klarna to the country’s Consumer Authority for allegedly failing to provide clear information about interest rates on its buy now, pay later products.
The Consumer Council asserts that Klarna does not comply with regulations requiring transparent disclosure of credit terms, often omitting or obscuring this information in its online advertising and website. “We believe Klarna is not complying with the marketing regulations for credit,” commented Guro Sollien Eriksrud from the Consumer Council.
Klarna is also facing scrutiny in the Netherlands, where a court recently determined that the company could not demonstrate that it avoided profits from late fees. The judge indicated that Klarna’s practices might classify it as a lender, which would subject it to more stringent regulations.
Additionally, the Dutch government is working to prevent the proliferation of buy now, pay later services in physical retail spaces, urging Klarna to rethink its plans for expansion into brick-and-mortar stores.
In December, Klarna encountered further regulatory challenges when it was fined Skr500 million ($50 million) by Sweden’s Financial Supervisory Authority for deficiencies related to anti-money laundering compliance.