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Retailers react to disposable vape ban.

5 Feb 2024

The retail sector has been responding to government plans to ban disposable vapes as part of plans to tackle the rise in youth vaping.
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UK’s indie food retailers to be recognised in the Farm Shop and Deli Retailer Awards 2024.

23 Jan 2024

Bakers, butchers, cheesemongers, delicatessens, fishmongers, greengrocers, village stores and small farm shops from around the UK have been shortlisted in the Farm Shop and Deli Retailer Awards... Read more…

How Independent Retailers Can Stand Out in A Crowded Market

23 Jan 2024

An interesting article has appeared in Forbes reflecting many of the issues that Indie Retail & ActSmart members will be experiencing – the challenges and... Read more…

Eight in Ten Small Businesses Taking Positive Steps to Strengthen Their Enterprises in 2024

22 Jan 2024

Eight in ten small business owners (81%) are planning to develop their companies in 2024, according to new research from Novuna Business Finance. The research shows that over a third (33%) are... Read more…

The Times names 12 of the UK’s best independent bookshops — as chosen by its readers.

22 Jan 2024

The Times has named 12 of the UK’s best independent bookshops — as chosen by its readers. Readers highlighted places that combined books with a friendly and welcoming atmosphere.... Read more…

Bira Launches Second Annual Campaign for Valentine's Day - #LoveYourHighStreet

22 Jan 2024

The British Independent Retailers Association is championing the high street again this Valentine's Day for the second consecutive year with its #LoveYourHighStreet campaign.
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Family-run shop in Lanarkshire village scoops community retailer award for second year running.

10 Jan 2024

Nads Store, a family-run shop in Law, Lanarkshire, has been named Community Retailer of the Year at the Scottish Asian and Business Awards ceremony for the second year running.
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Bira urges vigilance against loan fee fraud following FCA guidance.

10 Jan 2024

In the face of the escalating threat of loan fee fraud, the British Independent Retailers Association (Bira) is urging its members to heed the Financial Conduct Authority's (FCA) recent guidance... Read more…

Canal boat record store Rubber Ducky Records is back afloat.

9 Jan 2024

Canal boat record store Rubber Ducky Records is back on the water after it sank last April, ruining over 1,000 vinyl records and a stow of music equipment stored on... Read more…

New research shows UK retail sector powered by entrepreneurs and start-ups

9 Jan 2024

While mass-market players continue to dominate the UK retail industry, research by Geek Retreat shows that 15% of Brits have set up their own business in the past ten years, and of these,... Read more…

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Pablo Escobar's brother sues Europe's most valuable fintech company for millions

Posted on in Business News, Cycles News

Recent ehammervents have once again highlighted the growing concerns centred on the UK's growing use of Buy Now Pay Later (BNPL) services.

The focus of these concerns generally tends to be on the poorly informed consumers that use the services, and the considerable amount of debt that they can rack up because of this. However, this time around the complaint has come from Escobar Inc, the trademark company of a Colombian drug lord and one of the many companies partnered with one of Europe's most valuable BNPL firms.

Escobar Inc has now been added to the list of MPs, financial campaigners and charities calling on BNPL providers to take on more responsibility in their evaluations of who should be accepted for their lending services.

How BNPL firms are misleading hundreds of distressed consumers

Financial campaigner, Alice Tapper, said that she had received hundreds of messages from distressed young people, particularly throughout the first lockdown, with one in six 18 to 24-year-olds having turned to buy-now-pay-later services. This mounting problem was also bought to the attention of Labour MP Stella Creasy, who has now written to the Financial Conduct Authority and the Advertising Standards Authority to raise the issue of BNPL.

The increasing number of young shoppers getting into large amounts of debt arising from BNPL services has also led to a rallying of debt charities making their support available to shoppers. Debt charities including Stepchange, the Money Advice Trust, the Debt Support Trust and Christians Against Poverty are calling on BNPL firms to better explain the risks to customers' finances in their adverts.

While there is evidently an increasing number of concerns being raised, a major issue with some BNPL providers such as Klarna, is that they are not authorised by the UK's Financial Conduct Authority (FCA) but use "passported" permissions from their own countries to operate in the UK. While Klarna is regulated by the Swedish Financial Supervisory Authority, Alice Tapper has called for all BNPL products to be regulated in the UK. On Klarna's pay-later products, there is no legal compulsion to include risk wording on adverts and at checkout and accordingly she observes there is therefore "no counter balance to this genius marketing".

 

Escobar Inc believes suing Klarna will delay its IPO

It appears that the UK is not the only country that has had issues with the popular Buy Now Pay Later firm. Escobar Inc, the trademark company of a Colombian drug lord are now suing Europe's most valuable fintech company, Klarna, in the US.

Escobar Inc was set up by Pablo's brother Roberto Escobar and is run by a Kalashnikov-wielding Swedish executive known as "El Silencio". The company claims that Klarna is unfairly withholding €400,000 in cash owed to them for a thousand flashy Escobar branded mobiles phones sold via the Klarna platform. Escobar Inc is now intent on using the lawsuit to delay Klarna's IPO.

While the sums involved are not huge for Klarna, valued at $10.6bn in its last funding round when it raised $650m, it's may prove to be an unwelcome distraction for the group which is preparing for an IPO in the US and raises questions about how it got into this awkward position to begin with.

Speaking to the popular new-media site, Sifted, Gustafsson said that he was confident of winning and even delayingKlarna's planned IPO with the court case.

"I can guarantee that since my lawyers are very good, we will win in the US and that will be a big loss for Klarna. If we take this to a jury, we can get a temporary injunction. Then we can stop Klarna from going public in the US."

 

Encouraging sustainable BNPL shopping

Growing concern among an array of stakeholders, which now includes the company of a Colombian drug lord, begs the question as to whether BNPL shopping is sustainable and whether something must change in the way money is loaned.

It is possible that the loan providers will be forced to face repercussions for the debts arising. Some debt charities argue that it is the retailer's responsibility to educate their customers of the risks being undertaken when committing to any BNPL payments, and therefore could be blamed if a customer finds themselves in debt. Although it is questionable as to whether users would pay attention to any warnings, or whether the retailers understands the product sufficiently enough to fully and correctly educate their customer.

It is evident that all BNPL providers operating in the UK should be regulated by the FCA and ASA in line with existing UK based providers and that retailers require the necessary support and education regarding BNPL products and the potential risks to their customers.

 

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