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Hidden basement bar in Liverpool named 'best vegan restaurant' in Britain

12 Sep 2023

A family-run Liverpool restaurant hidden inside a basement is officially Britain's best vegan venue.
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Shoplifters working in organised groups targeting shops with co-ordinated raids

11 Sep 2023

A warning has been issued that shoplifters in the UK are becoming increasingly “emboldened” and appear to be often orchestrated by organised criminal groups, which steal to order,... Read more…

Shops urged to prepare for single-use plastics ban coming into force on 1 October

11 Sep 2023

It has been suggested that some shop owners may be unaware or unprepared for the upcoming change to regulations on single-use plastics on plates, bowls, trays, containers, cutlery and balloon... Read more…

National Lottery retailers urged to transfer retail agreement to new operator.

30 Aug 2023

Allwyn, incoming operator of The National Lottery, has urged independent National Lottery retailers to log on to its new online retailer portal via Read more…

Retailers sceptical about Home Secretary’s call for ‘every theft’ to be investigated.

30 Aug 2023

Shop owners have expressed scepticism that the Home Secretary's recent call for every theft to be investigated by the police will come to fruition, suggesting that police resources are already... Read more…

Consumer confidence shows ‘renewed optimism’ against falling core inflation

29 Aug 2023

Consumer confidence is showing “renewed optimism” against a backdrop of falling core inflation, new figures suggest.
 
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Coventry shop owners launch street market to bring more people into the area

29 Aug 2023

Shop owners in a part of Coventry have rallied together to launch a street market, with hopes of boosting the number of people that visit the area.
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Indies drinks retailers short-changed in government duty consultation

16 Aug 2023

Independent quality drinks retailers were woefully underrepresented among those consulted by government over the duty changes now hitting businesses, it has been claimed, after industry magazine... Read more…

Online bookshop hits £3 million for independent sellers

16 Aug 2023

Online bookshop Bookshop.org has reached its target of raising £3 million in profit for independent booksellers in its fight for them to “thrive in the world of ecommerce”.
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Indie craft baker takes home five Great Taste Awards after only 16 months in business

15 Aug 2023

A start-up craft baker from south-east London who sells his produce at local food markets has taken home five Great Taste Awards after only 16 months in business.
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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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