Not upheld: Goods and services under S75 complaint against Klarna Financial Services UK Limited

Decision detail

Summary

Mr B purchased a laptop and earbuds using a 24-month fixed sum loan from KF, with a promotional 20% discount applying only to the laptop. When the earbuds proved faulty and Mr B sought a refund under section 75 of the Consumer Credit Act 1974, KF declined the claim. The ombudsman found the complaint not upheld because the earbuds at £99 fell below the £100 minimum cash price threshold required for section 75 protection, and Mr B had been clearly informed before purchase that the discount applied only to the laptop. KF acted reasonably in continuing to request payments under the credit agreement, though the ombudsman noted KF's regulatory duty to provide forbearance if Mr B experiences financial difficulties.

The Ombudsman's reasoning

The ombudsman applied section 75 of the Consumer Credit Act 1974, which requires purchased goods to have a cash price between £100 and £30,000 for joint liability to apply. Since the earbuds were priced at £99, they fell below the minimum threshold and KF was not liable under section 75. Additionally, Mr B was clearly informed before purchase that the discount applied only to the laptop, so there was no misrepresentation he could reasonably rely upon. Mr B provided no persuasive evidence of the laptop being faulty. KF did not delay the claim process and acted reasonably in requesting payments continue under the credit agreement terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website