Klarna promotes money wellness amid credit-score controversy

Brand has been criticised for buy-now-pay-later service.

Klarna has launched a campaign encouraging shoppers to step away from impulse purchases as calls continue for the brand to share the impact of its buy-now-pay-later service on consumer credit scores.

Created by Forever Beta, "Klarnasense" shows prospective shoppers as they battle with the urge to buy slightly impractical items, including a sporty bike and a giant barbecue, in the end opting instead for more sensible versions of each item to get more bang for their buck.

This is accompanied by an online hub that includes quizzes, blog posts and advice to encourage consumers to adopt a more mindful approach to shopping.

Launching today (Friday) on Channel 4 alongside partnerships with influencers across social media platforms, the work was directed by Greg Barth through Friends Electric.

"The inspiration behind the campaign is really about allowing consumers to make the right choice at the right time and making responsible decisions, both with their spending and their shopping," AJ Coyne, head of consumer marketing at Klarna, told Campaign.

Built around what Coyne called the "psychology of three" – "Do I love it?", "Will I use it?" and "Is it worth it?" – the brand’s "Klarnasense" concept was created in collaboration with retail psychologist Kate Nightingale.

Coyne continued: "The campaign for us is all about 'thinking thrice' to encourage consumers to make informed decisions. 

"Frivolous spending does happen and different people are more prone to it, but the tools that the campaign is providing help them understand what shopper they are before they make a purchase."

Klarna has recently come under criticism from a campaign group, known as Go Fund Yourself, that warns against hidden impact from using the fintech brand on a consumer’s credit score.

While Coyne maintained that the service will "never impact your credit score", terms and conditions outlined by brands including Asos, Missguided and H&M note that credit scores may be affected if Klarna is not paid by a user for an order.

According to Comparethemarket.com, nearly half (45%) of young people who have used a buy-now-pay-later scheme have missed at least one payment.

Although Coyne said that Klarna has been in contact with Go Fund Yourself and is "open, transparent and always looking to learn and implement feedback", a post from the campaign’s Instagram page claimed that the brand has threatened legal action for the group's coverage.

View this post on Instagram

An important update. Please swipe to read ? ? Consistency, trust and transparency are so important when it comes to financial information, values that would be enforced if these products were regulated. It’s because they’re not that consumers are left confused, and without vital information to make good financial decisions.? ? Buy Now Pay Later is the future of credit and retail. It's here to stay. That means there is an unimaginable amount of power in the hands of just 2-3 companies, one of whom has significant market share. We’re at a critical point. What happens next will determine the direction of this industry. Either towards regulation, protection and transparency or, without change, an inevitable race to the bottom at the expense of the most vulnerable. ? ? This is not about whether these products are useful or not, they can be. This is about whether there’s enough protection in place to prevent a debt crisis. Without regulation, this will happen… it’s already happening... we’ve seen a 10 fold rise in bankruptcies amongst 18-25-year-olds from 2016 to 2019. If you want to get a sense of what this looks like, search ‘Klarna’ on TikTok.? ? This week, Klarna will launch a PR campaign. This is a start but I sincerely hope they will consider taking practical action and answer important questions that so far, they have refused to answer. ? ? Consumers deserve more than glossy TV ads. They deserve honesty and consistent information to make good financial choices. Only then can you expect personal responsibility. ? ? #RegulateBuyNowPayLater? ? If you’re on board, here’s how to support in 3 mins ??? ? 1?? Share this far and wide? 2?? Sign and share the Change petition. Link-in-bio.? 3?? Tweet - Link in bio for a tweet in one click. Tag your MP? if you can.? ? THANK YOU!? ? ? Alice x? ? ? ? ? ? #Klarna #buynowpaylater #personalfinance #savingmoney #moneytips #debtfreejourney #debtfreegoals #ukdebtfreecommunity #ukdebtfree #debtfreeliving #regulatebuynowpaylater #consumerrights #consumerprotection #klarnaa #debtfree #livelikenooneelse #debtfreecommunity

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Klarna has since stated that the potential legal action relates to the refusal of Go Fund Yourself to change what Klarna said was "inaccurate information", as well as Go Fund Yourself’s use of the Klarna trademark. 

An official statement from the brand said: "We have actively and transparently engaged with the campaign from the start, providing open responses and asking the campaign to accurately reflect our products. 

"Long before the campaign, we had a number of initiatives under way, including the launch of our ‘Klarnasense’ campaign to ask consumers to pause before purchasing. 

"We will commit to further work with our retail partners to ensure the accuracy of their websites and continue to increase the number of inputs consumers make in the sign-up process to further ensure awareness of their chosen payment method."

Last week, Klarna partnered Highsnobiety for a raffle targeting sneaker heads.