Klarna Can Compel Arbitration Over its ‘Pay in 4' Service Terms

Klarna Inc. is allowed to compel arbitration after a user sued the company over its service agreement and incurred overdraft fees from her bank, the Second Circuit ruled Friday, reversing a district court’s decision.

Najah Edmundson sought to represent a proposed class of people who used Klarna’s “Pay in 4" service and incurred an overdraft fee from a third-party financial institution “as a result of a Klarna repayment deduction,” the US Court of Appeals for the Second Circuit said. Edmundson alleged that Klarna “misrepresents and conceals the risk of bank overdraft fees that consumers face when using its pay-over-time service” ...