Klarna Faces Troubles in Norway After Failure To Comply With Transparency Rules
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Klarna, the Buy Now, Pay Later (BNPL) giant and the leader of the sector, recently encountered troubles in Norway after the country’s Consumer Council reported it to the Consumer Authority.
According to the Consumer Council, Klarna allegedly failed to provide clear details regarding interest paid on its BNPL products. The Council noted that the company is failing to comply with the local rules, which require clear signage regarding the terms and conditions of credit.
Instead of providing the required information, Klarna allegedly omitted or buried this information from its website and online ads.
Consumer Council’s Guro Sollien Eriksrud stated that the Council believes Klarna is not complying with Norway’s marketing regulations for credit.
Klarna Suffered Regulatory Challenges In Two Other Countries
Apart from its rising troubles in Norway, the company has seemingly encountered issues in the Netherlands, as well. The Dutch court recently ruled that Klarna was unable to prove that it avoided profit from late fees. After reviewing the case, the judge highlighted multiple signs that Klarna is acting like a lender.
However, in this case, the company would be subject to considerably stricter regulations. In addition to this, the Dutch government also made a move to halt the spread of BNPL services onto the high street. As part of this, it asked Klarna to reconsider its plans to introduce its service to physical stores.
This is not the first time that Klarna has faced regulatory pressure recently. Only about six months ago, in December 2024, the company was issued a Skr500 million ($50 million) fine in its home country of Sweden. The fine was issued by Sweden’s Financial Supervisory Authority due to anti-money laundering deficiencies.
In other words, Klarna has faced different issues with regulators in at least three European countries over the past six months, regarding questionable business practices that do not comply with local laws.
