The “Buy Now Pay Later” company is scheduled to be exposed to government fires following the results of a report issued Tuesday by former Financial Conduct Authority (FCA) interim chief executive Chris Woolard.
Sky News reported that the sector is under higher scrutiny after concerns that the company is encouraging customers to buy products they cannot afford.
Woolard was commissioned by the FCA Board to conduct reviews on companies such as Klarna and ClearPay. Klarna has 1 million active users per month, valued at $11 billion (£8.5 billion). It has been a huge success among young customers who shop online.
A Klarna spokesperson said, “We are extremely comfortable in a regulated environment and sincerely support further regulation of Buy, which pays for the UK’s later sector.”
“I agree that regulations do not respond to new products or changes in consumer behavior. It is essential that regulations are modern and purpose-friendly, and that digitality of transactions and evolving consumers. It reflects both preferences.”
To use Klarna, shoppers simply provide their name, email, date of birth, mobile number and billing address to defer payments for up to 30 days.
Alice Tapper is campaigning for stricter regulations for the “Buy Now Pay Later” company.
“Since we launched the campaign, these scam cases have been worryingly common, thanks to how easy it is to use these products and the little information needed to access them. It’s mainly thanks to you. It’s a honeypot for con artists and simply shouldn’t be that easy.”
