- Klarna scraps popular financing product used by 90,000 buyers
- He says this is unrelated to current issues affecting users’ credit scores.
Buy now, pay later app Klarna is scrapping a popular finance product used by 90,000 shoppers just weeks before Christmas amid a series of technical issues.
The company says the closure of the Financing Account product is not related to the problems that have occurred during the last five weeks in which refunds have not been recorded.
The regulated credit product allows customers to spread the cost of big-ticket purchases such as furniture, phones and other technology.
At the beginning of October, customer payments made by direct debit through these accounts were not recorded and were classified as ‘late payments’, which could affect credit ratings.
Klarna says it is aware of the issue and it will be fixed before the next payment date in December.
Users having problems with the financing account in Klarna posted in X
Klarna says it is aware of the issue and will fix it before the next payment date
The Financing Account, used by about 90,000 customers, allows users to spread the cost of expensive purchases over a period of between six and 36 months.
But the product will be liquidated when the current debts have been settled.
The accounts work like a credit card, so they can be used for multiple purchases that can be paid off at the same time gradually with interest.
This is different to the “buy now, pay later” scheme, which only applies to one purchase at a time and will not be affected.
Of Klarna’s 18 million British customers, 0.5 percent use the Funding Account, or about 90,000 people.
Klarna’s website says customers can select the “Financing” option at checkout and choose their preferred schedule and interest rate.
The website also notes that a credit check is performed every time someone applies for a financing option.
The first payment is due one month after the store processes the order, and is due monthly on the same date until it is fully repaired.
But at the beginning of October, customer payments through these accounts that were made by direct debit were not recorded.
Although the money left customers’ bank accounts, Klarna’s system did not link them to the Funding Account, making it appear that users were not paying for purchases.
These ‘late payments’ could affect users’ credit ratings.
At the beginning of October, customer payments through these accounts that were made by direct debit were not recorded, frustrating users due to the problem.
One customer who experienced this issue said they reported it to Klarna but received no response for over two weeks and customer service ignored their messages.
Shawn Smith posted on X: ‘@Klarna still has not received a response to my missing payment I made on October 4th.
“This is not good service and customer service ignores my messages because they are from a specialist, but it’s been more than three business days now.”
Another user responded and said: ‘Same here. I messaged them twice. They say there is a problem with your payments.
‘It would be useful if you contacted those affected. I have disabled automatic payment so I don’t get charged twice.
‘[It better] It will not affect my credit score like a late payment or incur any fees.
Another user posted: “Klarna has received three payments from my bank, none of which appear in my Klarna account, and I am now receiving late payment emails when I have already overpaid.”
Once Klarna became aware of the problem, it said it stopped reporting information to credit reference agencies such as Transunion so that the problem did not affect its customers’ credit ratings.
This came too late for some users, but the company said it is now in the process of correcting these credit files.
A Klarna spokesperson said Sun: ‘We are very sorry for the inconvenience caused to a small number of customers when using one of our legacy financing products.
‘The problem will be resolved before the next payment date, at the beginning of December.
‘We are taking steps to ensure that this issue does not leave a mark on credit files. “Our other payment products, including BNPL and Pay Now, are not affected.”
MailOnline has contacted Klarna for comment.
