I was chased for payment for a Klarna purchase I never made – and I don’t even have an account

RETIREE Peter Blyth had never heard of Klarna until he received a letter from the company claiming he owed hundreds of pounds.

Peter was shocked to receive a demand for £854 from the Buy Now, Pay Later firm last week.

Klarna told Peter he owed money for purchases from online retailer Choice Store in May.

But the 69-year old ex-business owner from Milton Keynes has never been a customer with Klarna and has never shopped at that store.

After ringing the company’s helpline, he discovered a fraudster had used just his name and address to set up an account under his identity.

“My name and address were the only details that were mine - but someone else’s email address and phone number was logged down,” Peter said.

“What shocks me is how a fraudster is able to open an account with very limited information.”

Klarna lets shoppers spread the cost of their purchases over three interest-free instalments and it’s available at big shops like ASOS, H&M and New Look.

To sign up for an account, you need to supply your name, email, address and phone number.

Klarna will then do some checks to make sure it's you, before opening an account.

Then you need a billing address and a debit or credit card to make a payment.

Although no payment details had been linked to the account - which means his bank details weren’t compromised - Peter is “very worried” that a fraudster was so easily able to sign up to Klarna with just a few of his personal details.

He’s also concerned about his credit score - that’s because Klarna transactions are now logged on your credit files, which means lenders can see any late payments.

“If you try and open a bank account, you have to go through lots of hoops and checks - you need ID and a utility bill, for example,” he said.

“You can’t just walk in anywhere and open a bank account.

“The question is, what checks did Klarna make?

“They say on their website they do loads of checks to protect a Klarna customer against fraud.

“But it doesn’t mention what checks are involved in opening an account - you would expect it to be as rigorous, but clearly it’s not.

“This amount that Klarna is chasing could just be one payment. There could be a whole string of payments to follow.”

A Klarna spokesperson apologised to Peter and confirmed his account had been suspended then closed after its investigation.

It added that it will make sure no marks will be put on Peter's credit file as a result of the fraud.

They added: “Fraud is an industry wide issue and unfortunately, very occasionally, fraudsters do manage to get through our defences. 

“When this happens Klarna’s Fraud Policy ensures customers never pay for purchases they did not make and we treat every case as an opportunity for us to further improve our systems and prevent this from happening again.”

It claimed that its fraud rates are less than half of what you would see on debit or credit cards.

Resolver consumer expert Martyn James said that while online financial services might be convenient, if identification procedures are “flawed”, crooks will “rush in and exploit the system”.

He added: “It’s vital Klarna and other online financial services providers close these loopholes as soon as possible and go out of their way to ensure no one's credit is damaged as a result of the actions of fraudsters.”

Moneycomms personal finance expert Andrew Hagger said: "I'm dumbfounded that Klarna would actually allow this to happen.

"If it really is that easy then fraudsters will be rubbing their hands and Klarna will be left with a massive pile of bad debt."

What to do if you’re a victim of fraud

Peter isn't the only victim of buy now, pay later fraud - there are hundreds of similar complaints on social media.

Customers were warned last year of crooks signing up to buy now pay later services in their name.

While cases of fraud in general are on the rise, jumping 36% to 5.1million in the year to September 2021 according to the Office for National Statistics.

If you think you’ve been scammed, call your bank immediately using the number on the back of the card.

You should tell Action Fraud - report it online or by calling 0300 123 2040 (Monday to Friday, 8am-8pm).It will tell the police and give you a crime reference number.

Using a credit card when shopping online gives you more protection as you are covered under the Consumer Credit Act, which says you are entitled to a refund if items are not delivered or are not as described.