Not upheld: irresponsible lending complaint against Klarna Financial Services UK Limited (trading as Klarna Bank)

Decision detail

Summary

Miss B complained that Klarna Bank irresponsibly provided her with credit in March 2021 for a £289.09 games console purchase, repayable at £6.03 monthly over 47 months. She argued the credit was unaffordable, citing late payments, payment arrangements with other lenders, additional credit taken in December 2020, and credit refusals as evidence of financial difficulty. The ombudsman found that Klarna Bank's credit check was reasonable and proportionate, and that the available credit report evidence did not indicate financial difficulty at the time of application. The monthly payment amount was found to be sustainably affordable, and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that a credit check was a reasonable and proportionate check for the credit limit of £560 and loan amount of £289.09. Although Klarna Bank did not provide evidence of what its credit check showed, the available credit report evidence did not indicate Miss B was in financial difficulty in March 2021. The monthly payment of £6.03 would reasonably have been considered sustainably affordable. The late payment marker and subsequent credit refusals were not sufficient evidence to show the lending decision was irresponsible at the time of application.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website