Klarna selling a debt that was never a bad debt and was closed months previously.

ancientferguson

So, during my conversation with the FCA this morning I managed to ascertain that the "Complaints" phone number that both JCIA and CARS have provided the FCA are the same CARS HQ regular number

01256 306 700

No surprises here. 

Klarna have provided a Complaints team phone number to FCA of

0808 189 3333

I have made a complaint to the FCA, which are quite different from the Ombudsman, about the behaviour of the companies involved. I will shortly be populating my complaint with a load of documentary evidence.

I am shortly going to contact the CSA about their member. I don't expect much from an Association that claims to be the, "Voice of the collections agency".

They can be found here, if interested:

https://www.csa-uk.com/members/?id=48973827

I have also written to the Managing Director of CARS, which can be found on this

 https://register.fca.org.uk/s/firm?id=001b000001HhfVDAAZ 

scroll down to the "complain about the firm" bit. The name on the email address in the MD.

So, for those that this has affected, when you do the clawback via your bank, this re-opens the supposed closed account and some young person will call you again and harass you about your overdue account and you not keeping to your arrangement.

A mind blowing bunch. 

Hopefully this is useful to somebody.

TheWoodler

A similar story has now been picked up in the Times Money page (Troubleshooter, 29/6/2024, p61). There was an extra layer of complexity: the debt was a fraudulent transaction which was disputed, but Klarna took no action to provide the complainant with redress. 

The next they heard was, in fact, undergoing this same debt-collection MO. The involvement of the journalist has now resolved the issue, but the complainant now feels it’s important to take that case to the Ombudsman. 

nyermen

CARS needs to have the facility to create Direct Debits removed.

Indeed, albeit possibly through a third party or their banking service provider (who'd also handle collection requests).  I'm still also unclear on how CARS got account information to be able to set up the DD mandates. Were account details also passed on by Klarna as well, or were the mandates "handed over" (something that I didn't think was allowed except with acquisitions, but I'm unsure on that).

ancientferguson

nyermen said:

CARS needs to have the facility to create Direct Debits removed.

Indeed, albeit possibly through a third party or their banking service provider (who'd also handle collection requests).  I'm still also unclear on how CARS got account information to be able to set up the DD mandates. Were account details also passed on by Klarna as well, or were the mandates "handed over" (something that I didn't think was allowed except with acquisitions, but I'm unsure on that).

Indeed, Klarna passed on my bank details, phone number, email address. Everything an out of control debt collecting company would need, to harass somebody and remove cash. Combine that with their, 'guilty until proven otherwise' attitude, you have the perfect cash culling machine.

A reporter from MSE has asked Klarna's Press Office for comment and as a result, I received a pro-forma response about investigating my complaint, from Customer Service. Nothing from anybody that appeared to be taking ownership of what happened to me or the many others. Bear in mind, I had complained 40 days previously to them getting in touch with me and they only actually acknowledge I existed after their Press Office thought it wise to do something, before being outed.

The response from customer service included the line, "Please know that I am doing more investigation regarding your query. Rest assured, we will contact you as soon as possible with a resolution."

The sender's email address was a generic customer service email address, that I responded to and received an email by return, that began:

"Dear valued Klarna customer, 

Due to the increased volume of queries some delays may occur whilst processing your request"


I mean, come on, have you ever known a company that can't stop digging a hole? 


Please, please, please avoid Klarna.

T3dd5worth

WorriedFromBristol said:

ancientferguson said:

WorriedFromBristol said:

Hi,

I'm glad I've found this thread as I've been sweating for the last couple of days.
I took a credit agreement with Klarna out three years ago for financing a garden building.  My last contact about this from Klarna was at the end of February which showed that there was still around a year left on the agreement, payments had been made and the account was not in arrears/default.

Yesterday I received a text to say I needed to contact a firm called BPO Collections urgently about a debt. 
After a bit of back and forth with the agent I was informed that I was around £250 in debt which was due for collection for JCIA.  I said I had no idea who that was and he replied it was due to "Klarna Credit Services" or something to that effect.  I've had no correspondence at all to say this loan had been transferred (I'm sure there is a legal obligation of some kind here) and I'm just as in the dark as everyone else is about this.
I said I needed some time to look into this - to be fair to the chap he was helpful and put a hold on the account for a week.  This is before I learned more about the situation.

Digging through my Spam emails I found an email from BPO collections sent at the same time as when I received the text.  This had the loan account number (the Klarna account) and so I was able to cross-reference it against the last statement I received from Klarna.

This email also stated something shocking -  essentially, pay 50% of the outstanding balance now, and we'll essentially write off the other 50% - but they'll mark the account as "partially settled" which of course I don't want on my credit file!
 
It very much seems, as the above posts indicate, that Klarna have just sold on a load of credit accounts, whether open or closed, as bad debt to JCIA, who are now using collection agencies to recover the debt.  If so, surely this amounts to fraudulent activity on Klarna's part. 
From a regulatory point of view surely Klarna were supposed to inform customers that the credit provider was changing to JCIA.  Furthermore, as this is a signed credit agreement between Klarna and myself, that they must honour the terms of the agreement until settlement?

Hi there,

Are you saying you have continued to make payments to Klarna up until now or did Klarna stop collecting after selling the debt?

Hi,

It looks like Klarna have just stopped collecting after selling the debt, looking at my bank statements. I'd obviously overlooked this.

Thanks
(Removed by Forum Team)

Good evening, 

I have a little bit of an update on our situation. I was waiting on a response from BPO since the 21st of June and hadn't recieved any updates. I decided to give them a call this evening to check on the progress on the query/complaint. They informed me that JCIA have closed the account with BPO and have taken back the account. 

I asked why this might be. They informed me that JCIA only tend to leave accounts open with collection agencies for a limited amount of time. I mentioned that I had only recieved the email about the debt on June 20th. They then informed me that they were transfered the account all the way back in March. My "debt account" was sat with BPO for 4 months before even sending the first email.

They did mention that they could have taken the account back due to the fact I was still making payments even after the "debt" was sold to JCIA. 

I have to try and call JCIA tomorrow to find out why they have closed the account and taken the account back. 

I will let you know if I ever reach an actual outcome.

sourcrates

T3dd5worth said:

Good evening,  

I decided to give them a call this evening to check on the progress on the query/complaint. 

They informed me that JCIA have closed the account with BPO and have taken back the account. 

I asked why this might be. They informed me that JCIA only tend to leave accounts open with collection agencies for a limited amount of time. 

Its common practice with all debt purchasing companies to farm the debts they buy out to collection agencies to collect on their behalf.
They buy in bulk, without knowing the previous history of any of the accounts they purchase.

If you query the debt or ask for evidence of liability, or as in your case, make a complaint, the automatic response is to return the debt to the client, they have no time or enthusiasm to deal with customer complaints.

They collect the debts on a sale or return basis, fine if the customer pays up, if not then the client can deal with it as they see fit, they may write the debt off, or rinse and repeat with another collection company, or you might not ever hear from them again.

It`s pot luck.

Saving2Spend

Further to my original post on 29th May, I have not had any response from Klarna, despite my prompting. Having given Klarna every opportunity to resolve this situation and offer an apology, I have referred the matter to the Financial Ombudsman, hopefully this will bring about a resolution.

Saving2Spend

Hopefully my final words on this saga, having referred the matter to the Financial Ombudsman, I am pleased that the matter has now been resolved to my complete satisfaction. I can recommend the Financial Ombudsman’s service, whose investigator provided regular updates throughout.

Captaindoug19

I'm a bit late to the party but have only just found this thread.
Wife's account was fully paid up and Klarna sent a confirmation letter advising the the account was clear. Credit report shows the account to be clear. Balance £0.00
In June CREDITLlNK removed by direct debit an amount equivalent to monthly payments made to Klarna. This was clearly labelled "1st payment".
This was refunded using the direct debit guarantee and nothing further was thought about it.
13th March 2025, two letters were received (in the same envelope) from JCIA & bwlegal claiming that an amount of money was still outstanding. (This is the first time I have had any contact with either institution.)
I've complained to all three institutions and the debt collector (bwlegal) has put the case on hold until June pending further investigation.
After reading this thread I'm wondering what exactly they need to investigate and why it's taking so long.
Thank you everyone who has contributed