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Klarna Buy Now Pay Later Fees Class Action Overview:
- Who: Klarna is being sued by a California customer who says he was hit with bank fees from using the service despite being told it was free.
- Why: The plaintiff says Klarna targets young and poor people, misleading them to think there will be no fees associated with the service, yet they later get hit with bank overdraft fees.
- Where: The case was filed in a California federal court.
Klarna tricks young and poor customers into using its “buy now, pay later” service by misrepresenting the true operation and risks of the service, a new class action lawsuit alleges.
Plaintiff Nathan Hale filed the class action lawsuit against Klarna, Inc. Apr. 28 in a California federal court, alleging violations of California consumer laws.
He said customers had been deceived into using the company’s buy now, pay later service, because they were misled about the true risk of the service.
“These risks include the real and repeated risk of multiple insufficient funds fees or overdraft fees imposed by users’ banks as a result of automated Klarna transfers from consumers’ checking accounts,” the lawsuit states.
Klarna Targets Low-Income People, Class Action Alleges
The class action alleges that Klarna specifically targets poor consumers and those struggling to make ends meet on a week-to-week basis.
Hale says Klarna markets itself as a service that allows users to pay for purchases at a later date with no interest, fees or hassle.
“These representations are false. In fact, there are huge, undisclosed fees and interest associated with using the service,” the lawsuit states. “This massive risk is known to Klarna but is omitted from all of its marketing.”
Hale says, in his case, he had a $42.84 payment deducted from his account by Klarna, which then caused him a $29 overdraft fee from his bank.
Founded in 2005, Klarna has expanded to 17 countries and serves 90 million shoppers, the lawsuit says. It is now one of the biggest buy now, pay later services in the United States, built on the backs of people living paycheck to paycheck, Hale alleges.
Hale is looking to represent anyone who used Klarna and incurred an overdraft fee as a result of a Klarna repayment. He’s suing under California consumer and business laws.
Hale is seeking certification of the class action, restitution of all fees taken as a result of Klarna deductions, compensatory damages, fees, costs and a jury trial.
The news comes after Klarna was hit with a similar class action in 2021 alleging its buy now, pay later service specifically targets poor consumers struggling to make ends meet and overburdens them with undisclosed bank fees and interest.
Have you used Klarna and been hit with bank fees? Let us know in the comments!
The plaintiff is represented by Scott Edelsberg of Edelsberg Law, P.A.
The Klarna Class Action Lawsuit is Nathan Hale v. Klarna, Inc., Case No. 3:22-cv-00598-DMS-AHG, in the U.S. District Court for the Southern District of California.
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283 thoughts onKlarna Class Action Alleges ‘Buy Now, Pay Later’ Claim Misleads Customers
I just had similar issues with my klarna account over the last few months. I’ve removed cards from accounts to prevent charges from from wrong accounts or credit cards. Even after removing the cards they still charge the removed accounts if the card on file is declined. The charges occured within hours of the declined payment. Didn’t even give me a chance to transfer money into my account instead charged my other bank account and caused my credit card payment that was pending to get returned. I make my payments on time and I’m tired of not knowing what account they decide to charge with out my concent. They cost me so many fees and headaches just because they don’t care what account they get payment from as long as they get payment. I had no idea they could change bank accounts and cards after I removed them from my klarna account. It’s not right
I’ve used Klarna
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I stopped using Klarna recently. To start, it was okay…first loan “4 payments in 2 months”, the second loan was a 6-month loan, which didn’t fit their “pay-in-4” narrative; I thought they’d changed their policy. No…third loan attempt went back to the 4 so I talked with CS, who said they never offered 6-month loans…but my record stared them in the face. I don’t put up with lies. I left Klarna.
Also, their withdrawal dates are inconsistent. I had a 4-payment loan, payable in 25% amounts on the 5th and 20th of two months. Erratically, the withdrawals would occur on the 5th, then the 28th, then the 2nd, then the 17th. Radically inconsistent and slack-lackadaisical. This is supposed to be the computer age. As far as the collections claim: Klarna ‘mistakenly’ sent several good-standing accounts into collections, charged fees and threatened litigation. They rightly got in trouble for that. Whoever started Klarna should go back to raising corn.
Good morning, I have used Klarna for a long time and it felt like they were always out to get me with a bunch of fee’s…