Inside Klarna
Jun 5, 20205 min read

How we protect our customers and prevent fraud.

Klarna K logo

by Klarna

At Klarna our customers are at the heart of everything we do. We want you to feel safe when shopping with us, and make sure you’re protected from any suspicious activity.

Fraud is a challenge across the retail and payments industry, and criminals are becoming more-and-more sophisticated so it’s essential that at Klarna, we remain one step ahead.

How does Klarna prevent fraud?

At Klarna, we have strong anti-fraud controls in place to protect our customers and prevent fraudsters from making unauthorised purchases.

We have a number of measures in place (we can’t reveal them all otherwise we will educate those who wish to manipulate the system). Some of the ones we can reveal are as follows.

1. Risk engine

We have developed a sophisticated in-house risk engine from our experience over the past 15 years. When a shopper attempts to place an order, we check over one hundred data points as well as third-party vendors for verification.

2. Identity Checks

We verify the identity and address of all our customers against external data sources including a credit check. This varies between a soft and hard check, dependent upon the Klarna product used. If we can’t get sufficient identity confirmation from the independent data providers, we reject the transaction.

3. Authentication Checks

For a small number of cases where the fraud risk requires further checks, we also use additional authentication tools. Here we request information from customers to verify their identity using methods such as knowledge based challenge questions.

We are constantly enhancing our anti-fraud measures and security, with recent improvements such as with the introduction of One Time Passwords for customer verification at time of purchase.

If we detect that a fraudster is trying to use another individual’s details to buy something with Klarna, our fraud team will do everything they can to stop the transaction and protect the individual’s details from further exposure within Klarna. We work with our retailers and logistics providers to prevent delivery and intercept parcels if they have already been dispatched, however, like with all payment providers, this isn’t always possible.

How do we protect our customers and victims of fraud?

Whilst fraud is an industry wide problem across financial services providers. Every victim of fraud is one too many and each of them must be protected from the impact of these criminals. This is why Klarna’s Buyers Protection Policy is not just for Klarna customers and their purchases, but also protects victims who may not use Klarna themselves but whose identities have been used fraudulently.

Our Buyers Protection Policy is in place to make sure that you don’t pay for purchases you didn’t make or are not satisfied with. Customers are also protected if the goods are defective or are not what they purchased. This applies to any online purchase made via Klarna and aims to let our customers feel at ease when shopping on our retailers’ websites.

Read more about our Buyers Protection Policy here.

For general questions about fraud, please visit our FAQ’s here.

What should I do if I am a victim of fraud?

If you are concerned that you may be a victim of fraud, or you require any fraud prevention advice, you can contact us by phone on 0203 005 0837. Our fraud team will take the necessary steps to prevent any further fraud at Klarna and will start an investigation into the case.

You should also report the fraud to Action Fraud. Action Fraud is the UK’s national fraud and internet crime reporting centre where you should report fraud if you have been scammed, defrauded or experience cyber crime. Simply select ‘Start reporting’ to submit your case online or alternatively call Action Fraud on 0300 123 2040.

How can I learn more about fraud and how to stay safe?

We think it is important that everyone learns more about fraud, and education is key to prevention. To find out more about what scammers are looking for and how you can stay safe, we recommend visiting the following websites.

  • CIFAS  – An independent, not-for-profit organisation working to reduce fraud and related financial crime in the UK.
  • Take Five – A national awareness campaign led by UK Finance and backed by the UK Government.
  • Citizens Advice – Provide consumers free, confidential information and advice to assist with financial, legal, and consumer problems.
  • Action Fraud – UK’s national fraud and internet crime reporting centre.

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