LONDON, ENGLAND - JUNE 04: Sebastian Siemiatkowski attends the official launch of the Klarna Pop-Up on June 04, 2019 in London, England.

Summary List Placement

In April 2020, as the UK entered its first full month of COVID-19 lockdown restrictions, 31-year-old blogger and author Clare Seal was scrolling through Twitter when she saw something that she said left her “gobsmacked”. 

An ad stated that for every order made using Klarna on fashion retail site ASOS, the popular Swedish financial service would make a donation to the International Committee of the Red Cross. Klarna allows consumers to “buy now, pay later,” offering financial options such as “pay in three” where the payments are split across three months, and “pay later” which delays payment by 30 days. 

Seal runs “My Frugal Year,” the blog and Instagram account she started when faced with £27,000 ($37,198) of debt in 2019 where she chronicled her effort to get out of the red.

As someone with a close understanding of consumer debt, Seal said she found Klarna’s promotion with ASOS to be “cruel,” leading her to tweet: “At a time when financial insecurity is reigning supreme for many and the ability to fulfil the ‘pay later’ part of the BNPL bargain is shaky at best, this seems like irresponsible marketing at best, dangerous manipulation at worst.” 

Genuinely gobsmacked by how manipulative this promo is. Encouraging people to take on debt (Klarna is real debt FYI) for the sake of giving to charity seems a cruel way to play on people’s wish to help at the moment. https://t.co/pL8GkqzFfU

— Clare Seal (@claremseal) April 29, 2020

The UK’s Advertising Standards Authority (ASA) had also taken notice of Klarna’s social media marketing.

In December 2020 the ASA ruled that four influencer advertisements Klarna ran between April and May 2020 were “irresponsible” for encouraging the purchase of beauty or clothing items to help with “lifting” or “boosting” consumer moods during lockdown. 

The ads were particularly onerous given that they ran at a time “when many people were experiencing difficult circumstances and isolation during the lockdown, including financial concerns and mental health problems,” the ASA said in its ruling. 

Klarna responded at the time by stating that it supported more clarity in the space. “This is frankly a bigger topic than us,” the company said.

Behind the scenes, Klarna had already begun reaching out to industry professionals and those linked to the influencer space to gauge their interest in joining a yet-to-be-created “influencer council.” 

Since Klarna first launched in the US and UK in 2015, the company …read more

Source:: Business Insider

      

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