Klarna acts to curb debt

KLARNA will soon start reporting the use of its products to credit reference agencies to make sure customers do not take on too much debt.

The buy-now-pay-later (BNPL) firm has previously been criticised for luring young shoppers into unsustainable levels of indebtedness, as there was no way of checking how much consumers had bought using Klarna or other BNPL providers. But from June 1, Klarna will report customers’ details to Experian and TransUnion.

This will let other finance providers, such as banks, check how much BNPL debt a person has taken on when assessing them for other loans such as credit cards and mortgages.