Money guru Martin Lewis has warned of an “explosion” of buy-now, pay-later companies which he said were targeting the under-30s and getting them into debt. Lewis told MPs in a House of Commons select committee hearing that regulation was urgently required. “It is absolutely the fastest-growing form of credit and it is targeted at the under-30s. And if you forgive me, most policymakers are not under 30 and it has gone under the radar.” Klarna is the biggest of a wave of buy now, pay later (BNPL) firms, including ClearPay and LayBuy, which lets shoppers make purchases and pay later, crucially without fees or interest. Klarna alone has almost 10 million customers in the UK and is opening 95,000 accounts a week. Globally it has 85 million customers and was recently valued at around £8bn. “Advertising is done by influencers on Instagram, where they are pushing the feelgood hashtag Klarna. That is fundamentally inappropriate for a credit product,” said Lewis. But while the Financial Conduct Authority and the Treasury are understood to be examining regulation of the emerging sector, Lewis warned it may be too late. “My issue is that, just like with payday loans, it will be too late. It is unregulated, without controls both in product design and communications. When people have a problem – and often it actually works pretty well – there is no ombudsman you can go to, because it is unregulated. I would call for maximum speed to move this into the regulatory environment.” But Klarna’s UK country lead, Alex Marsh, rejected suggestions that it is targeting naive young adults. “Regarding targeting under-30s, this is inaccurate. Klarna is aimed at anyone who values convenience and who wishes to spread the cost of purchases, without incurring any fees. The average age of a Klarna customer is 33 and our fastest-growing demographic is Gen X – those aged between 40 and 54.” He added that Klarna was a fully licensed bank operating at a high standard, but that “this is not true of everyone in this sector”. He said Klarna, founded in Stockholm in 2005, fully supports “appropriate regulation” and that it has been engaging with the FCA on the topic.