Klarna pay in 3 - NO PROTECTION

Mazzuk23

HI all, very new to this!  I was scammed by a fake company advertising on Facebook for "too good to be true" prices, yes... I should have heeded my own brain's warning!  However I thought well they are offering Klarna Pay in 3, must be ok as Klarna surely vet companies they provide such financial services to.  Cut a long story short, said garden furniture ordered in Feb never arrived.  I'd paid all 3 instalments 1 by credit card and two by bank debit card whilst waiting as I knew delivery would be a while.  I reported non delivery to Klarna who said they'd investigate. They dragged their heels so long despite constant chasers that I pursued with my bank and card complaint for chargebacks.  Both gave me these.  Within a month both companies reversed their decision one took the money back from me and the other left it as me owing Klarna, which I refused to pay as Id had no goods.

I submitted an escalated claim to Klarna and reported to Financial Ombudsman.  Klarna finally early September declined my case saying they were not liable.  Meanwhile they had referred the balance I owed them to debt collectors who had been calling and writing and turned up at my door!

I was hoping the Ombudsman would help but Klarna pay in 3 is unregulated and they can't help.  It's not a huge amount of money, but this company are now trading under another name, I have proof they scammed other people too.  Is there anything else I can do, is anyone else as silly as me to fall foul of this type of thing?     I've had to pay the debt collectors as I didn't want my credit score impacted!

Aylesbury_Duck

Given that you've now paid the debt collectors, I don't think there's anything you can do.  

HHarry

More than £100?  If so, section 75 it with the credit card company.  This is very different to a chargeback.  Have a search on the forums for more info and other cases.

born_again

HHarry said:

More than £100?  If so, section 75 it with the credit card company.  This is very different to a chargeback.  Have a search on the forums for more info and other cases.

S75 would not work.
No debtor creditor link, due to klarna taking the payment.
Charge back would fail on same grounds. Who you are paying are not supplying the goods.

Op should not have paid the debt collectors that turned up on door step. They have no right to claim funds.

eskbanker

HHarry said:

More than £100?  If so, section 75 it with the credit card company.  This is very different to a chargeback.  Have a search on the forums for more info and other cases.

Section 75 will only apply if there's an unbroken debtor-creditor-supplier chain, so paying a fourth party such as Klarna breaks that and negates a s75 claim if it's the actual supplier who's breached the contract.

Ayr_Rage

@HHarry and @Mazzuk23 please have a read of the MSE article.

ML has been warning about BNPL and the lack of regulation or protection quite often in his various media performances appearances.

https://www.moneysavingexpert.com/loans/buy-now-pay-later/

TELLIT01

eskbanker said:

HHarry said:

More than £100?  If so, section 75 it with the credit card company.  This is very different to a chargeback.  Have a search on the forums for more info and other cases.

Section 75 will only apply if there's an unbroken debtor-creditor-supplier chain, so paying a fourth party such as Klarna breaks that and negates a s75 claim if it's the actual supplier who's breached the contract.

Isn't the situation the same if you use Paypal, that is to say you can't use S75 or Chargeback?  You are at the mercy of Paypal and their decision.

sheramber

Mazzuk23 said:

HI all, very new to this!  I was scammed by a fake company advertising on Facebook for "too good to be true" prices, yes... I should have heeded my own brain's warning!  However I thought well they are offering Klarna Pay in 3, must be ok as Klarna surely vet companies they provide such financial services to.  Cut a long story short, said garden furniture ordered in Feb never arrived.  I'd paid all 3 instalments 1 by credit card and two by bank debit card whilst waiting as I knew delivery would be a while.  I reported non delivery to Klarna who said they'd investigate. They dragged their heels so long despite constant chasers that I pursued with my bank and card complaint for chargebacks.  Both gave me these.  Within a month both companies reversed their decision one took the money back from me and the other left it as me owing Klarna, which I refused to pay as Id had no goods.

I submitted an escalated claim to Klarna and reported to Financial Ombudsman.  Klarna finally early September declined my case saying they were not liable.  Meanwhile they had referred the balance I owed them to debt collectors who had been calling and writing and turned up at my door!

I was hoping the Ombudsman would help but Klarna pay in 3 is unregulated and they can't help.  It's not a huge amount of money, but this company are now trading under another name, I have proof they scammed other people too.  Is there anything else I can do, is anyone else as silly as me to fall foul of this type of thing?     I've had to pay the debt collectors as I didn't want my credit score impacted!

They won’t get your money back but you could report them to Trading Standards If enough people report them they will investigate them. 

eskbanker

TELLIT01 said:

eskbanker said:

HHarry said:

More than £100?  If so, section 75 it with the credit card company.  This is very different to a chargeback.  Have a search on the forums for more info and other cases.

Section 75 will only apply if there's an unbroken debtor-creditor-supplier chain, so paying a fourth party such as Klarna breaks that and negates a s75 claim if it's the actual supplier who's breached the contract.

Isn't the situation the same if you use Paypal, that is to say you can't use S75 or Chargeback?  You are at the mercy of Paypal and their decision.

Chargeback doesn't have the D-C-S chain stipulation, but for s75 it depends on how PayPal is being used - if the supplier chooses to use PayPal as their payment processor then you should be OK, but if the purchaser makes the decision to use their own PayPal account then that's different:

https://www.moneysavingexpert.com/credit-cards/paypal-section75/ (which also explains how s75 doesn't work with BNPL purchases)

Grumpy_chap

How has the OP determined that the company advertising on social media were a fake company / scam and not simply a company that failed to perform to contract?

What attempt did the OP make to contact the company and resolve the non-delivery?

If this was a genuine scam / fraud and not just poor performance, is there any avenue for the OP to pursue under APP rules?

A_Geordie

Grumpy_chap said:

If this was a genuine scam / fraud and not just poor performance, is there any avenue for the OP to pursue under APP rules?

APP rules only applies to bank transfers using faster payments or CHAPS, not card payments.