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Klarna rapped by UK watchdog over Covid credit promotion

Klarna rapped by UK watchdog over Covid credit promotion

The UK's Advertising Standard Authority has banned an Instagram influencer campaign for buy now pay later giant Klarna that encouraged people to use credit to 'boost their mood'.

The promotional campaign, which ran in April and May this year with four Instagram influencers, ran posts urging people to splurge on clothes and beauty products to help raise spirits during the Covid-19 pandemic.

One post ran: "During these times, it’s the little things that can have a huge impact on boosting your mood. Over the last couple of weeks social distancing, I’ve discovered a love for FaceTiming, making my small flat homely and realising the power of getting dressed and making an effort in the morning - if nothing else, it makes me feel human and like ‘me’ again. And that is a wonderful feeling right now. Thank you @klarna.uk for the simple reminder that getting dressed up can be a total mood booster…"

The ASA's probe followed a complaint from Labour MP Stella creasy who damned the posts as 'irresponsible" by luring people in low spirits into debt.

Klarna claimed the ads were intended to highlight that "self-care, skincare routines and pampering could be beneficial for improving one’s mental health and staying entertained during the lockdown period".

In its ruling, the ASA says: “We acknowledge that purchasing non-essential items was likely to be a source of comfort for some people during the national lockdown. However, each ad promoted the use of Klarna’s deferred payments services.

“We concluded that in the context of the challenging circumstances caused by the lockdown at the time, including impacts on people’s financial and mental health, the ads irresponsibly encouraged the use of credit to improve people’s mood.

"The ads must not appear again in its current form. We told Klarna Bank AB, and influencers Bradley Harper, Claire Menary, Aisha Master and Yasmin Fatollahy, that their future advertising must not irresponsibly encourage the use of Klarna’s deferred payment service, particularly by linking it with lifting or boosting mood."

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 December, 2020, 14:051 like 1 like

When finserv companies give credit, they attract the charge of driving people into debt. When finserv companies don't give credit, they invite the criticism of Financial Exclusion.

Despite this "Heads You Win, Tails I Lose" situation faced by it, I'm amazed at how finserv somehow still manages to be a top spender in digital advertising among all industry verticals:)