Klarna to provide debt advice service for users

The Buy Now, Pay Later (BNPL) provider will signpost debt advice services from MAN to give consumers access to credit advice “around the clock”.

MAN, which is provided by UK government body MoneyHelper, connects consumers directly to the debt advice services of StepChange, Citizens Advice or the National Debtline. MAN automatically identifies the service with the most available advisers, allowing customers to access advice “as quickly as possible”.

Klarna said the the partnership is the latest of many initiatives to encourage responsible borrowing, including the recent launch of an “opt out” tool which enables its customer to “pre-decide” not to use credit. Klarna is also limiting access to credit products for users who fall behind on payments to prevent their debt from accumulating.

The BNPL provider added that the partnership was part of its preparation for the FCA’s implementation of its Consumer Duty, which will set higher and clearer standards of consumer protection across firms and require them to put their customers' needs first.

Commenting on the news Flora Coleman, director of global policy and government relations at Klarna, said: “We are proud to be the first BNPL service to join forces with MAN and give customers a simplified route to debt advice, and are calling on other BNPL providers to join us in providing the same access to advice and support, to ensure that customers’ interests are always put first.

Research recently commissioned by Klarna found that the majority of Brits are uncertain about the most basic terms of their credit agreements, with only two in five consumers able to answer the most basic questions about a credit card they have just applied for.

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