Klarna Unaffordable Lending and BNPL Affordability Complaints
A note before you start (5 August 2026): most BNPL lending only became FCA-regulated on 15 July 2026. For agreements taken out before that date the routes to a claim are limited — the affordability rules and the Financial Ombudsman's compulsory jurisdiction did not apply to BNPL activity (Zilch, regulated since 2020, is the exception). We are confirming with our claim partner exactly which BNPL agreements they can take on, and will update these pages once that is settled. Until then, please treat these pages as guidance on where complaints stand rather than an invitation to claim on a pre-regulation agreement.
If you used Klarna — Pay in 3, Pay in 30 days, the Klarna Card or a Klarna term loan — and the borrowing left you unable to keep up with essential costs, missing payments, or relying on further credit to get by, this page explains where you stand. The position depends on which Klarna product you used and when you used it. Klarna’s regulated credit products fall squarely within the FCA affordability framework. Its Buy Now Pay Later products (Pay in 3 and Pay in 30 days) are currently outside the Consumer Credit Act, but that changes from 15 July 2026, when third-party deferred payment credit becomes regulated.
Check your agreements on Recoup, our claim partner’s site
About Klarna
Klarna Financial Services UK Limited is the consumer-facing UK entity, established in 2023 to take over from the Klarna Bank AB Temporary Permissions Regime arrangement that ran post-Brexit. It holds:
- Consumer credit authorisation under FRN 987889 — covering the Klarna Term Loan, Klarna Card, and other regulated credit products.
- Electronic Money Institution authorisation under FRN 1021834 — granted July 2025, covering Klarna Balance, Klarna Pay, and the broader payments platform.
Klarna’s UK product range:
- Pay in 3 — interest-free purchase split into 3 instalments. Currently unregulated BNPL; falls under FCA regulation from 15 July 2026 for new agreements.
- Pay in 30 days — pay the full amount within 30 days, interest-free. Same regulatory status as Pay in 3.
- Klarna Card — currently a regulated credit product subject to CONC affordability rules from issue.
- Klarna Term Loan — longer-term financing for larger purchases, regulated.
Where complaints stand by product
Klarna Card and Klarna Term Loan
Both are regulated credit products. CONC 5.2A applies fully. If you were given a Klarna Card with a limit you could not realistically afford, or a Klarna Term Loan that was unaffordable, the standard unaffordable lending complaint process is available. Complain to Klarna; the eight-week response window applies; escalation to the Financial Ombudsman is available if the response is unsatisfactory.
Pay in 3 and Pay in 30 — agreements taken out from 15 July 2026
These will be regulated under the FCA’s deferred payment credit framework from Regulation Day. Klarna will need to carry out reasonable and proportionate creditworthiness assessments, provide pre-contractual information, comply with DISP complaints rules, and customers will have access to FOS. From that point, the standard unaffordable lending complaint route applies.
Pay in 3 and Pay in 30 — agreements taken out before 15 July 2026
Pre-Regulation Day agreements remain unregulated. The CONC framework does not apply, FOS’s compulsory jurisdiction over the activity does not apply, and Section 75 does not apply. That doesn’t necessarily mean there is no recourse — Section 140A of the Consumer Credit Act and common-law principles can still apply in some cases — but the practical landscape is much narrower than for regulated credit.
Patterns of unaffordable Klarna lending
Klarna’s scale (over 11 million UK customers) means many situations have come to FOS’s attention through complaints about the regulated products, and through wider FCA scrutiny of the BNPL market. Common patterns:
- Multiple parallel BNPL agreements — Klarna Pay in 3 alongside multiple other Pay in 3s, Clearpay, PayPal Pay in 3, with no single lender having visibility of the total commitment.
- Klarna Card limits not properly checked — for a regulated credit card, full CONC 5.2A applies. Where the card was given to a customer with obvious affordability strain on file, or where limit increases were applied without proper review, the complaint route is well established.
- Term Loans for refinancing existing BNPL — Klarna Term Loans used to consolidate Klarna BNPL balances or other debts, where the wider position should have been clear from open banking data.
- Vulnerability not identified — gambling activity, recent benefits, or other vulnerability indicators visible to Klarna through Open Banking data, but not acted on.
How a claim works
The process for regulated Klarna products (Card, Term Loan, post-Reg-Day BNPL):
- Eligibility check — review of the credit, when it was opened, what your circumstances were at the time.
- Evidence gathering — Subject Access Request to Klarna, bank statements from the period, statutory credit report.
- Complaint to Klarna — detailed evidenced complaint. Klarna has up to eight weeks to issue a final response.
- Klarna response — uphold, partial uphold, or rejection.
- Escalation to FOS — if the response is unsatisfactory, six months from the final response to refer to the Financial Ombudsman.
- Redress — if successful, refund of interest and charges, 8% statutory interest, credit-file correction, balance offset where applicable.
BNPL and the new FCA rules from July 2026 for the full picture on the regulatory transition.
Frequently asked questions
Can I complain about Klarna Pay in 3 from before July 2026?
The position is more limited than for regulated credit. Pre-Reg-Day BNPL is unregulated, so the standard CONC route doesn’t apply, and FOS’s compulsory jurisdiction over the activity doesn’t cover it. Section 140A claims and other common-law routes may be available depending on facts. Specific advice on the situation is sensible.
Will Klarna report missed BNPL payments to credit reference agencies?
Klarna began reporting BNPL payment data to UK credit reference agencies progressively from 2023. Missed payments may appear on your credit file, which a successful complaint can sometimes have corrected.
Does Section 75 apply?
Section 75 of the Consumer Credit Act gives joint and several liability between lender and merchant for goods that are faulty, undelivered or misdescribed. It applies to the Klarna Card. It does not currently apply to Pay in 3/Pay in 30 agreements, but will apply to those entered from 15 July 2026 onwards.
Related guides
- BNPL and the new FCA rules from July 2026
- Buy Now Pay Later claims hub
- The CONC rules on affordability
- How the Financial Ombudsman handles unaffordable lending complaints
- Do I have an unaffordable lending claim?
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