Klarna now reporting missed payments to credit agencies

[bitchstewie]

My understanding is that an absolute stload of younger people use this.

https://www.bbc.co.uk/news/business-55278927

Ticking time-bomb?

[nordboy]

It’s not reporting missed payments ‘Now’, it’s planning to in the future.

[CzechItOut]

It's funny. The James Rowntree Foundation, not known for its capitalist leanings, produced a report a while back which concluded that payday lenders (which Klarna is with just fancy branding) need to charge 100% interest and do doorstep collections in order to be viable.

This will all end in tears.

[anonymous-user]

Was James related to Joseph?

;-)

[CzechItOut]

JPJPJP said:

Was James related to Joseph?

;-)

Who's James Roundtree?

[55palfers]

CzechItOut said:

JPJPJP said:

Was James related to Joseph?

;-)

Who's James Roundtree?

Richard's brother?

[anonymous-user]

CzechItOut said:

Who's James Roundtree?

That's a good question.

[anonymous-user]

I used it for a watch as it was free. 4 payments interest free, what's not to love.

[anonymous-user]

Do they (Klarna and / or the retailer) bombard you with messages?

[untakenname]

Haven't used them but see no issue with them reporting customers who don't pay what they owe, likely the BBC picked this up as the Klarna clientele are ones that are always hard done by as they are incapable of budgeting or living like responsible adults.

[CzechItOut]

untakenname said:

Haven't used them but see no issue with them reporting customers who don't pay what they owe, likely the BBC picked this up as the Klarna clientele are ones that are always hard done by as they are incapable of budgeting or living like responsible adults.

Because:

What information do you use to carry out a soft credit check for Pay in 30 days? Will my credit score be affected?

A soft credit check does not affect your credit score and is not visible to other lenders. It stays strictly between us, you, and the agency we use to conduct the credit check. Your credit rating will not be impacted if you don’t complete your Pay in 30 days transaction on time. We will however send you multiple payment reminders and work together with you to try and make sure this doesn’t happen.

https://www.klarna.com/uk/blog/klarna-mythbusters/

[anonymous-user]

JPJPJP said:

Do they (Klarna and / or the retailer) bombard you with messages?

No it was only 75 quid but I dont see an issue.

[anonymous-user]

I was wondering if, as well as charging the retailer, klarna viewed the borrower as the product too.

[anonymous-user]

I'm not sure how they make money.

[Drezza]

The Spruce Goose said:

I'm not sure how they make money.

I'd guess that the retailer would give them a nominal amount (say 1%) of the transaction, might encourage more sales than normal if customers can pay in installments? Personally I'd never use it as I'm old fashioned and in the "if you can't afford it you shouldn't buy it" camp.

[CzechItOut]

The Spruce Goose said:

I'm not sure how they make money.

They charge the retailer a process fee per transaction and then there are fees if the customer does not pay within 30 days.

[bitchstewie]

Not sure if this is fully accurate but it has a fair bit of info.

https://www.investopedia.com/articles/personal-fin...

[anonymous-user]

Basically lay away yet you get it straight away.

I still think something has to change the money made cabt be enough on default level, as I understand minimal credit checks.

[anonymous-user]

The Spruce Goose said:

I'm not sure how they make money.

On the pay in 3 instalments, the fee to the retailer is up to 20p + 5.4% per transaction

and the retailer only gets the money up to 18 days after the sale!

https://www.klarna.com/uk/business/products/instal...

[Mazinbrum]

Drezza said:

I'd guess that the retailer would give them a nominal amount (say 1%) of the transaction, might encourage more sales than normal if customers can pay in installments? Personally I'd never use it as I'm old fashioned and in the "if you can't afford it you shouldn't buy it" camp.

One big advantage of using Klarna is buying clothes and shoes etc, order 3 pairs and return the two that don’t fit without paying upfront for them.