Not upheld: default reporting and credit file fairness complaint against Klarna Financial Services UK Limited
Financial Ombudsman decision DRN-6170167 of 2026-06-08T00:00:00+00:00. default reporting and credit file fairness complaint against Klarna Financial Services UK Limited. Outcome: Not upheld.
Decision detail
| Reference | DRN-6170167 |
|---|---|
| Decision date | 2026-06-08T00:00:00+00:00 |
| Firm | Klarna Financial Services UK Limited |
| Product | Personal loan |
| Claim type | default reporting and credit file fairness |
| Outcome | Not upheld |
| Remedy | No remedy ordered. The ombudsman advised that if the balance is cleared, the default will be marked as satisfied but will remain on the credit file for six years. Mr S was advised he can request the Credit Reference Agencies place a notice of correction on his credit file to provide context. |
Summary
Mr S complained that Klarna unfairly defaulted his personal loan account and reported it to his credit file without giving him a reasonable opportunity to avoid default. The default occurred after Mr S's bank card expired, causing missed payments in early 2025. Klarna sent a default notice on 17 March 2025 and registered the default on 17 April 2025 when the account was three months in arrears. The ombudsman found that Klarna made reasonable attempts to notify Mr S through letter, text and email, and that the timing of the default registration aligned with industry expectations and their terms and conditions. The complaint was not upheld.
The Ombudsman's reasoning
The ombudsman found that Klarna made reasonable attempts to notify Mr S of arrears through multiple channels using the contact details they held, which was sufficient. The default was registered on 17 April 2025 when the account was three months in arrears, which aligns with ICO guidance that defaults are generally expected by the time an account is three to six months in arrears. This timing was also in line with Klarna's terms and conditions. Therefore, Klarna acted fairly and reasonably in registering the default.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Klarna Financial Services UK Limited, all decisions | 7 | 0% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website