Klarna, as a provider of regulated credit and payment services and you, as a partner, play a key role in delivering good outcomes to retail consumers, and therefore must comply with the Consumer Duty. At Klarna, we are always working hard to make sure we're doing things the right way for our consumers, and to make things easy for our partners, and this is no exception.
What does this mean for Klarna?
- Created a Consumer Duty implementation plan which is now well underway.
- Assessed the outcomes for consumers of all open regulated products that will be live by the implementation date (Fixed-Term Loan).
- Made a number of proactive improvements to our products and services over the past year- see here.
- Communicated to all distributors of our Fixed Term Loan (regulated financing product) at the end of April 2023 - see here.
What we will be doing next?
- The outcome of our recent reviews is that no further fundamental changes to interest rates, fees, or the design of our product and services will be needed before the deadline of 31st July 2023.
- Due to our existing customer obsessed culture and our response to the cost of living crisis, we have already been continuously updating and iterating our products and services across the past year which has meant that we will not be asking merchants and partner to make any changes across our products and consumer journey in order to comply with the Consumer Duty.
- We are now focusing internally on ensuring appropriate documentation is in place, as well as tracking, monitoring and reporting on consumer outcomes so that we can show how consumer obsessed we really are through data and metrics and constantly look for improvements to drive even better consumer outcomes.
What merchants and partners need to do next (If you offer Klarna's Fixed Term Loan (Financing Product):
As you are a trusted partner of Klarna, and to the extent that you are undertaking a regulated activity in the UK for Klarna—or for Klarna’s consumers—you must review your own obligations under the Consumer Duty. All retailers must have clear, fair and not-misleading advertising which is balanced with prominent risk warnings and disclosures.
- Please review all consumer-facing communications (eg. social media, email templates, webpages, FAQs, in-store materials) and ensure that Klarna’s UK Financial Promotion rules are being followed where required. This will ensure good outcomes for customers’ understanding and help you meet the legal requirement to provide customers with the right information at the right time to equip them to make decisions that are effective, timely and properly-informed.
- Save for the above, we will not be asking you to make any changes across our products and consumer journey in order to comply with the Consumer Duty.