Not upheld: Other regulated complaint complaint against Klarna Financial Services UK Limited (trading as Klarna)

Decision detail

Summary

Ms Y complained to Klarna about three fixed sum loan agreements opened in her name in November 2021, claiming she was unaware of them and that they resulted from identity fraud by a third party (X). Ms Y discovered the accounts when checking her credit file and requested Klarna remove adverse credit information, but Klarna refused and did not investigate her fraud concerns. The ombudsman examined the evidence including application details, delivery records, and account activity, and concluded on the balance of probabilities that Ms Y had authorized the loans, either directly or by giving apparent authority to X. The complaint was not upheld, though the ombudsman reminded Klarna to treat Ms Y's financial circumstances with forbearance and work toward an affordable repayment plan.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test to determine what most likely happened. While the setup of the loans with X's contact details could suggest authorization, the ombudsman found the weight of evidence supported Klarna's position when considering: (1) the loans were set up in Ms Y's name with her personal details and home address; (2) goods were delivered to Ms Y's home address, which is atypical fraudster behavior; (3) significant repayments were made regularly; and (4) account activity showed someone regularly managing the accounts and attempting to pay. The ombudsman concluded Ms Y most likely gave actual or apparent authority to X to open the loans on her behalf, rather than being a victim of fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website