Klarna Sued Over ‘Predatory’ Automatic Withdrawal Practices (1)

Klarna Inc., the popular “buy now, pay later” provider, approves users for “purchasing power” without investigating their ability to pay and instead makes them agree to automatic bank withdrawals for some purchases, according to a proposed class suit filed in Chicago federal court.

“In other words, Klarna replaced underwriting with the right to pull payments directly from consumers accounts,” the complaint filed Monday says. “It extended reusable credit without determining whether its consumers had any ability to repay, then positioned itself to collect first by reaching directly into consumers’ accounts when payments came due.”

Klarna users are “disproportionately financially vulnerable” ...