Klarna, one of the world’s largest buy now, pay later (BNPL) providers, is once again under the spotlight as Norway’s Consumer Council has reported the company to the country’s Consumer Authority. The move comes amid growing concerns that Klarna is not providing consumers with clear and transparent information about the interest costs associated with its credit products.
According to Guro Sollien Eriksrud of the Norwegian Consumer Council, Klarna is failing to meet regulatory obligations under Norway’s marketing laws. These rules mandate that any advertising or promotion of credit services must include prominent and easily accessible information about key terms—particularly related to interest rates and fees. The Council alleges that Klarna either omits this information or hides it deep within its digital content, making it difficult for users to make informed financial decisions.
The regulatory pressure in Norway adds to the mounting legal challenges Klarna is facing elsewhere in Europe. In the Netherlands, a recent court ruling went against the company, highlighting Klarna’s inability to prove it had not profited from late fees charged to customers. The Dutch judge noted indicators suggesting that Klarna may be operating in a manner similar to traditional lenders—a distinction that would expose the company to far more stringent financial regulations.
In response to concerns over the growing influence of BNPL services, the Dutch government has asked Klarna to reconsider plans to expand into physical retail stores. Lawmakers there are becoming increasingly wary of the risks posed to consumers, especially as these services become more deeply embedded in everyday transactions.
The pressure doesn’t stop there. Klarna was hit with a substantial fine in December by Sweden’s Financial Supervisory Authority, which levied a penalty of SEK 500 million (approximately $50 million USD) for failures related to anti-money laundering (AML) protocols. Regulators cited significant shortcomings in Klarna’s systems for detecting and preventing financial crimes.
Taken together, these developments signal increasing regulatory scrutiny on BNPL firms like Klarna, as European authorities move to tighten oversight of a fast-growing sector that has thus far operated in a relatively light-touch environment.