Gamers left in the dark for nearly two weeks after they tried to pre-order the new Microsoft Xbox using the ‘buy now, pay later’ service Klarna have now been told if they want the console, they will have to pay for it in one go on the day of its release after all.
And those who had hard credit checks run on them and were told a direct debit had been set up by Klarna to pay for the console over two years were emailed on Tuesday telling them their application had been unsuccessful and they’d missed out.
The Swedish firm said ‘a small proportion’ of customers had been affected, but the numbers likely run into the hundreds if not thousands after it said demand for the new Xbox had been ‘ten times’ what it forecast.
Klarna issued a ‘final update’ on the Xbox pre-order debacle at the end of last week. Thousands were likely left with hard credit checks for financing applications for a console they did not get
Customers on social media platform Twitter said their credit scores had been damaged by the credit check, which unlike a ‘soft’ search appears on a customer’s credit file and is visible to other prospective lenders, for financing they have now not received.
And another group of customers previously told by Smyths Toys there would be a console available for them to pre-order, after a bungle between the retailer and Klarna saw it run out of stock, were emailed last week to say this had been sent by mistake ‘to a very small number of customers’.
It said the email should only have been sent to those who had been approved for financing by Klarna, as opposed to those whose status was left in doubt after a ‘technical error’ left them unable to complete their purchase, even though they were told a direct debit had been set up with Klarna.
The retailer, which along with GAME offered two versions of the new console as part of a bundle costing either £20.99 or £28.99 a month for two years, said in its email last Wednesday that those wrongly told a console would be reserved for them would be able to get one.
However, they would have to purchase it in-store from Smyths Toys, would not include the add-ons featured in the ‘All Access’ offer, and would have to pay in full when they collected the console on release day on 10 November.
This has effectively left them in the exact same situation they would have been in had they not bothered trying to pre-order using Klarna, leaving them with hard credit checks on their file for no reason.
Customers told their applications for Klarna financing were unsuccessful still have ‘hard’ checks on their credit file, with some reporting their credit score had been hit
That email last Wednesday came eight days after the original mix-up between Klarna and Smyths, a period in which shoppers were promised an update on how to complete their pre-order which never came.
Those affected also missed out on the chance of trying to pre-order the console the next day or purchase it from elsewhere, as they were either told not to try again by Klarna’s customer services team or were waiting on a response from the retailer.
Shoppers would likely have been more than happy to pay up in the first place, with the offer paid for through Klarna working out cheaper in the long run.
Shoppers were emailed by Klarna telling them a direct debit had been set up to pay for the Xbox. However it has since told people that their applications were actually unsuccessful
The Swedish company offers three ways for consumers to pay either in instalments or a month after ordering something, but only its financing agreement requires a hard credit check.
One customer caught up in the situation, Phil Lunt, previously told This is Money: ‘I could’ve bought a Series X outright, the only reason I wanted to go down the All Access route was because I thought it was a good deal for the console plus Game Pass Ultimate in the long run.’
Klarna has been trying to get a grip on the situation since the debacle on 22 September. It published a post on its website last Friday in what it described as a ‘final update’.
Klarna had partnered with Smyths Toys and GAME to offer a 24-month bundle for the new Xbox which is released next month
It said those who had applied for Klarna financing and had received an email confirming a direct debit had been set up had not had their applications completed after all.
‘As a result’, it said, ‘you have not secured an Xbox All Access pre-order console. We realise that this will be a disappointment to you and we are truly sorry for the experience you have had trying to secure the latest Xbox console.
‘If you would like to receive updates when new stock becomes available, you can sign up for your retailers’ newsletter on their websites. When new stock becomes available, you can apply again for the Xbox All Access package with Klarna Financing.’
An email sent by Smyths Toys to another person who tried to pre-order the Xbox and seen by This is Money said it ‘expected there to be further stock available before Christmas, so we ask that you keep an eye on our website for further stock replenishments.’
It said it had cancelled customers’ direct debits and would wipe all Klarna searches from applicants’ credit reports by 16 October, as they had not required credit after all, which would hopefully reverse any damage to any credit scores.
Klarna refused to disclose how many shoppers had been affected but some people on Twitter said the hard search remained on their credit report for now and negatively impacted their score.
One customer, Jonny Archer, was even wrongly told on Tuesday by Klarna’s customer services that he needed to contact the credit reference agency TransUnion to get the hard check removed.
One shopper who had a hard check Klarna was initially told he needed to ask the credit reference agency for it to be removed. However its customer services were subsequently corrected by its own Twitter account. Klarna is currently removing these hard checks
This message was subsquently corrected by Klarna’s customer services Twitter account and it said this was an error.
The credit reference agency Experian previously told This is Money people who spot errors on their credit files should report them to the lender which made them.
It added: ‘We have spent the last ten days analysing the opening of the pre-order window for the latest Xbox. There was huge demand, over ten times forecasts and we processed thousands of successful orders.
‘Unfortunately, for a small proportion of customers, we are disappointed to say that their experience did not meet the expectations that we set ourselves.
‘We have apologised before, and want to reiterate that for this group of customers we are aware that the experience was disappointing and frustrating.
‘Whilst it is of limited comfort, we have learned from the experience and have already worked alongside our partners to put in place some changes to help make sure this does not happen in the future.’
It said those who still had questions or problems should contact its customer services.