Klarna collection fees for late payers are not a business model, committee rules
The financial complaints institute Kifid has ruled that collection fees are not a core part of Klarna's business model after the company provided accounting evidence. Although Klarna won this specific dispute, the firm continues to face a major class-action lawsuit and potential future regulatory changes in the Netherlands.
The Dutch financial complaints institute Kifid has ruled that late payment and collection fees are not part of the business model for the payment service Klarna. This decision follows a detailed presentation by Klarna, supported by an accountant's report, which demonstrated that their revenue is primarily generated from merchant service fees rather than penalties from defaulting consumers. This marks a shift from previous cases where Klarna had lost rulings regarding their debt collection practices.
The specific dispute involved a consumer who accrued nearly 9000 euros in purchases, arguing that Klarna failed to intervene to prevent irresponsible lending. However, Kifid determined it lacked the jurisdiction to rule on this complaint because Klarna currently meets specific legal exemptions. While this case was decided in Klarna's favor, the company still faces a massive class-action lawsuit from the Stichting Massaschade & Consument, which seeks over 500 million euros in damages. Furthermore, legislators in the Netherlands are working on stricter regulations for Buy Now, Pay Later services following new European guidelines.
Based on reporting by ad. Translated and condensed by LocalHeadlines.
