Last Friday, I received a formal letter from Klarna in response to the campaign. This was preceded by a conversation on Zoom and a series of emails in which I asked them for the response to 8 important questions. The aim of these was to help to shed light on the inconsistencies in circulation and the reported experiences of Klarna customers. So far, they have refused to answer these questions.
In the most recent campaign response, I made three requests of Klarna, one of which was to provide answers to the following.
1. Has Klarna ever worked with debt collectors other than the three you mention?
a. Has there been any change to the agreement/terms and conditions you have with your DCAs?
b. Has it ever been the case that you worked with a DCA in which your contractual agreement with them did not explicitly require the DCA to not report to a CRA or carry out any procedure which could potentially damage an individuals score?
c. Has a Pay in 30 days or Pay in 3 instalments customer's score ever been impacted by using these products, even if this was then reversed?
d. Has a Pay in 30 days or Pay in 3 instalments customer's score ever been impacted after Klarna passed the customer to a debt collection agency, even if this was then reversed?
a. What is the procedure for when debts are written off by the DCAs? Could a customer face a CCJ for example? What are all of the possible outcomes?
b. What is the procedure for when the DCA cannot contact a customer? Could a customer face a CCJ for example? What are all of the possible outcomes?
b. Have these procedures and these outcomes changed at all?
c. If it is the case that Klarna has used debt collectors other than the three mentioned, what were their procedures?
d. Once a debt has been written off. What happens? Is a CRA involved in any way? Presumably, a default or CCJ would impact your score?
4. You state on your site that using Klarna Pay in 30 days or Pay in 3 instalments cannot impact your score, is there any way the use of these products could indirectly impact a person's credit score?
5. What would be your explanation be for a person's score having dropped after using a Pay in 30 days or Pay in 3 instalments product or after being referred to a collection agency? Could this have happened accidentally?
a. Why have your customer service representatives been trained to state that the Pay in 30 days or Pay in 3 instalments products do or might impact your score when you're referred to a collection agency?
b. Has this ever been true or accurate in any way?
c. Why have your customer service representatives been trained to state that the debt collection agencies used have different procedures and practices and that they cannot comment on these?
d. Has this ever been accurate in any way? Has it ever been the case that you did not have oversight of your DCA's (for Pay in 30 days or Pay in 3 instalments) procedures and practices and thus couldn't comment on whether their practices might impact a person's credit score?
7. Is it possible that a customer using Klarna Pay in 30 days or Pay in 3 instalments* in another region could have their score impacted by using the product or after being referred to a debt collection agency?
*or equivalent products which do not impact score upon application
8. Going forward, what will customers be told when asked the question I posed to your customer service employee: 'does the debt collection agency report the collection, which could then impact your score?'
I have said to Klarna that I understand the answers to some of these questions might be commercially sensitive. If this is the case and the answers do not have financial implications for consumers, I will happily view these under an NDA.
I believe it is reasonable for a consumer to understand all the possible consequences of using financial products, but Klarna will not share this information. These are important questions that consumers deserve answers to.