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'You are risking your credit score'

Today Programme

BBC Radio 4


Nikki Horner from Bedfordshire has told BBC Radio 4's Today Programme about an issue with Klarna, a buy now pay later firm, which offers different ways to pay, including a deadline of up to 30 days or making three equal monthly instalments.

She bought a bike from Halfords on 12-months interest free credit from Klarna but interest started to be applied after the first two months. Klarna told her she had been late-paying and had not made minimum payments - but she denied this. Klarna said it was not able to comment on individual cases.

Stuart Carmichael, chief executive of the charity Debt Support Trust, told Today that such systems of offering credit was "almost passing the responsibility to an external company instead of managing it yourself".

He said it meant retailers were able to sell more.

"How do you get around the problem of you don't have money to pay for something outright today. Well let’s not worry about that now. Let's push it down the road and we‘ve got a third party who’s willing to fund it so they are getting the benefit of increased sale and probably some sort of kick back from the people who are offering the finance."

He said it was easy to apply for such credit and some of the companies were not doing credit checks. But, he added: "For us it’s about affordably, credit checks tell you what happened in the past... What you are risking if you fail to pay, you are risking your credit score".

Klarna says that it does a "soft" credit check, which doesn't affect credit scores, for both options, to ensure customers have the ability to repay.

There's more on Klarna in this BBC story.

Standard Chartered changes executive pension deals

Standard Chartered
Getty Images

Standard Chartered has announced changes to the pension arrangements of is chief executive Bill Winters and finance director Andy Halford after protests from shareholders, as mentioned earlier.

The bank, listed in London but with a large presence in emerging markets, says that Mr Winters and Mr Halford will have their pension allowance reduced from 20% of salary to 10% of salary from 1 January 2020.

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elderly person with nurse

Deborah Cohen, Marianna Spring & Lucy Webster

BBC Newsnight

Hundreds of millions of pounds paid in care home fees are not being used for frontline costs, a study suggests.

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