Feeling Duped by Klarna?

If you’ve purchased items using Klarna’s Pay In Four you may be entitled to compensation up to $500. Under federal regulations, lenders are required to make certain disclosures to consumers about key terms of their loans. Klarna does not make these disclosures to its consumers. Consumers who use Klarna are often left surprised when Klarna begins charging them late fees, they incur overdraft or late fees, or there are problems with their credit.

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We are pursuing private arbitration claims against Klarna on behalf of consumers who used their Pay In Four loans. Successful claims could be entitled to up to $500.
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Frequently Asked Questions

What is this case about?

Klarna offers “Buy Now Pay Later” (BNPL) loans to consumers through their Pay In Four program. Klarna has structured this program to try and avoid federal credit regulations. Klarna charges “late fees” if consumers miss payments. Klarna and other BNPL providers do not make the disclosures required by the federal Truth-in-Lending Act before the consumer takes out the loan. If they provided the disclosures, this would impose additional barriers to consumers making frequent purchases using BNPL financing, something that BNPL providers want to avoid as the more consumers use BNPL, the more commissions and fees they earn.

Klarna offers “Buy Now Pay Later” (BNPL) loans to consumers through their Pay In Four program. Klarna has structured this program to try and avoid federal credit regulations. Klarna charges “late fees” if consumers miss payments. Klarna and other BNPL providers do not make the disclosures required by the federal Truth-in-Lending Act before the consumer takes out the loan. If they provided the disclosures, this would impose additional barriers to consumers making frequent purchases using BNPL financing, something that BNPL providers want to avoid as the more consumers use BNPL, the more commissions and fees they earn.

Klarna is engaging in other kinds of deceptive acts and practices. Several state Attorney Generals have questioned whether Klarna is analyzing if a consumer will be able to repay their loan before extending them credit. Click here to read more. This can leave consumers saddled with debt they cannot repay. Many consumers have complained that their Klarna loans are appearing on their credit reports with inaccurate information. Consumers should monitor their credit reports if they take out a loan with Klarna. Click here to read more.

The Truth in Lending Act (TILA) is a federal law that governs credit transactions. TILA requires companies extending credit to consumers to make certain disclosures about the interest rate, fees, payment schedule, etc. You can read more about it here. TILA regulates companies like Klarna, that extend consumers credit. If a company does not comply with TILA’s provisions, consumers are entitled to pursue a claim against the company for statutory damages. Recently, 21 state attorneys general have informed the Consumer Financial Protection Bureau that they believe Klarna should be following these regulations. You can read the letter here.

The Electronic Fund Transfer Act (EFTA) is a federal law that governs online banking and the electronic transfer of money. You can read more about it here. The EFTA regulates financial institutions like Klarna so that these companies take proper precautions with your money and make certain required disclosures to consumers. If a company does not comply with the EFTA’s provisions, consumers are entitled to pursue a claim against the company for both their actual damages, and minimum statutory damages.

No, this is not a class action lawsuit. Your individual arbitration claim will be decided on its own facts, which is why we ask for more information than is normally required when signing up for a class action settlement.

Arbitration is one way to resolve your disputes with companies other than filing a lawsuit in court. It is a private process that is generally faster and less formal than court. Your claim will be decided by an arbitrator, who is a neutral person chosen by you and the company. We can select an arbitrator for you who is fair and neutral.

Most of the time, arbitration can be conducted either by telephone, video conference, or document submission. In-person hearings are generally not required.

Our fees will be a percentage of the settlement or recovery we obtain for you. That amount will depend on the rules in the state you live in. We only receive a fee if you win, and you will never owe us any money.