Dutch Consumer Foundation Sues Klarna for Over €500 Million, Alleging BNPL Credit Rule Violations #

A Dutch non-profit organisation has filed a class action lawsuit against Swedish buy-now-pay-later company Klarna, alleging the company’s deferred payment services function as unregulated consumer credit and have left customers with unexpected costs and unmanageable debt.

Stichting Massaschade & Consument (SMC), a foundation that pursues mass damages claims on behalf of consumers, announced the legal action on 13 July. The group argues that Klarna’s pay-later products, which typically allow shoppers to settle purchases within 14 to 30 days, constitute loans and should therefore be subject to the regulatory framework governing consumer credit agreements in the Netherlands.

According to SMC, Klarna did not carry out adequate creditworthiness assessments before extending credit, did not adequately inform consumers about the risks and true costs involved, and handled disputed transactions, returns, and fraud cases negligently. SMC chairwoman Lucia Melcherts said the service’s apparent convenience masks its nature as a credit product. “In fact, it is simply a loan,” she said in a statement. “Strict rules apply to this, and they exist for a reason.”

The lawsuit also targets Klarna’s practices around underage users. SMC alleges that the company failed to implement effective age checks and that its verification processes were easy to circumvent, allowing minors under 18 to use the service without valid parental or guardian consent, a requirement under Dutch law. A 2026 report from the National Institute for Family Finance Information found that 13% of Dutch students under 18 use BNPL services, a figure the report partly attributed to weak age verification.

The proposed class covers any Dutch consumer charged additional costs for late payment or debt collection, as well as any minor who used Klarna’s pay-later service without valid consent. Parents and guardians of affected minors may also register for the claim. SMC estimates the total repayment demand could exceed €500 million.

The lawsuit follows several regulatory and legal setbacks for Klarna in the Netherlands. Earlier this year, it became known that the company had been collecting customer debts without being registered in the mandatory debt collection register. In May 2025, a Dutch court ruled that Klarna’s late fees were illegal, finding the company had extended consumer credit without properly informing customers. Financial complaints body Kifid also found in April that Klarna had seriously breached consumer credit rules in two investigated transactions.

SMC said it would prefer to reach a resolution through dialogue and invited Klarna to engage in discussions. In a statement, a Klarna spokesperson said the company believes BNPL products are beneficial for Dutch consumers. The Dutch government has confirmed that BNPL providers will fall under the Financial Supervision Act from November 2026, when they will need to obtain an AFM licence and conduct creditworthiness assessments, with an outright ban on under-18 usage also planned.

Source: ICLG