Klarna heads to Mighty Hoopla Festival as BNPL shoppers face debt problems
Buy now, pay later specialist, Klarna, will host its own Karnival of Retail Wonders at this year’s Mighty Hoopla Festival, set to take place in London tomorrow.
This will host interactive fairground games, Instagrammable photo moments and chill out zones.
All the carnival classics will be there, including Hook a Shoe, Bling Toss and the Lipstick Shy, with prizes of popcorn, candyfloss and rainbow marshmallows up for grabs.
People will also be able to sit in Giant Teacups and, according to a press release, “get the ultimate festival look with endless sustainable glitter”.
Festival goers who play and win all three games will be entered into a draw to watch popster Cheryl, from the VIP enclosure. Also up for grabs is a Groopla ticket for six friends to attend next year’s Mighty Hoopla.
To enter, people simply need to share a picture at the Karnival, and tag @Klarna.UK with the hashtag, #KlarnaKarnival.
Emily Thomas, Consumer PR Lead at Klarna, which was recently valued at $46 billion in an investment round led by Japan’s SoftBank, says: “We are so excited to be hosting our Karnival of Retail Wonders at Mighty Hoopla.”
“Fashion is about self-expression, confidence and identity and following our successful partnerships with Attitude Pride at Home and the LGBT Foundation, we are delighted to continue supporting the LGBTQ+ community.”
“We are looking forward to meeting all the festival goers, enjoy the Karnival and win some fantastic prizes.”
Citizens Advice research
One in ten shoppers who use buy now pay later have been chased by debt collectors, according to Citizens Advice.
According to its research, these people were charged £39 million in late fees in the past year.
Of those who were referred to a debt collector for missed payments, 96% experienced a negative consequence.
They reported at least one of the following: sleepless nights; ignoring texts, emails and letters in case they were about debts; avoiding answering the door; borrowing money to repay the debt; or their mental health getting worse.
Yet the charity found that not one of the BNPL checkouts on leading retailers’ websites warned people they could be referred to debt collectors for missed payments. Instead this was only flagged in the T&Cs on a separate page, if at all.
Citizens Advice conducted mystery shopping at 100 leading retailers and found 38 offered BNPL, with 22 offering more than two options, meaning there were a total of 74 BNPL checkouts.
Out of those offering BNPL, only 11% warned shoppers they were taking out a credit agreement, the remaining 89% put this information in the small print or T&Cs.
Citizens Advice asked the BNPL firms featured in the research if they ever referred customers to debt collectors.
Klarna, Clearpay, Laybuy and Openpay confirmed they do this as a last resort. Splitit said it doesn’t. PayPal refused to comment.
Citizens Advice says it is s calling on the Treasury to urgently regulate this space as it “fears shoppers have been left unprotected and ill-informed during the rapid expansion of the sector”.
UPDATE: After publishing this article, we received the following statement from Alex Marsh, Head of Klarna UK: ‘‘Unlike credit card providers who intentionally keep people in debt with minimum payments and high fees and interest, our credit products are interest and fee free and are designed to keep people out of debt with clear upfront payment plans.”
“At Klarna we only ever use debt collection agencies to help us contact customers we are unable to reach and we do this on fewer than 1% of orders.”
“The debt collection agencies we work with are all FCA authorised and will only contact customers by telephone or email and do not use bailiffs. We encourage any of our customers whose circumstances have changed, to please get in touch so we can help you with a plan to get back on track.”
