‘This is the first time we’ve ever been to a debt auction’: Why you need to know about it
Reddit’s debt-funding service, which lets users borrow money without the need for a credit card or bank account, will go on sale for the first public auction this week.
But for now, the platform will not give users access to a “debt” toolkit.
“There is not a debt-tracking app out there,” said a Reddit employee.
“It’s just an online platform.
It’s a tool to enable people to finance their debt.”
For the uninitiated, debt is the term used to refer to the amount of money a consumer has to borrow to make a purchase.
Users can pay with bitcoin, ether or PayPal.
“We think of debt as being like a loan,” said one Reddit employee, who asked not to be named for fear of upsetting customers.
“You can borrow money to purchase things and use the money to pay off your debt.”
To be clear, Reddit does not allow users to sell their debt to other people.
Instead, the company provides a free service that allows users to borrow money by putting their own money into the platform, called “subscriptions”.
Reddit is also the home of several other popular debt-collection platforms, including Paypal and the infamous Debtors Anonymous.
But Reddit’s service is different from most of those, which rely on an individual’s credit history and a credit report to identify whether they’re in debt.
Reddit has a system called “debit alerts” which warn users of possible credit card and bank debt and can even identify credit-card accounts with incorrect balances.
Users are then able to “pay-off” their debts by making payments to the platform.
“Debt alerts” have been in use since 2012 and allow users who have unpaid debts to take out a loan from Reddit, or make a payment to the company to have their debt forgiven.
“What we are doing with debt alerts is giving people the tools to make payments on their debts,” said Reddit co-founder Alexis Ohanian.
“If you are in debt and you have a debt, you can call us and we’ll refund you.”
But Reddit has no central repository of unpaid debt.
Instead the company will “look at” debt for users in its network, and then take that data to identify those in need of repayment.
Reddit also said that its debt-reporting tools will not be able to detect whether a user owes money or not.
“These tools don’t actually tell you what debt you owe, they only tell you how much debt you have,” said Ohanian, referring to debt-monitoring tools like Credit Karma, which tracks a user’s credit scores.
“When we collect information from the people we want to identify debt, it’s actually based on their information.”
Users who do not have a credit-report from a credit bureau, or who are unable to find a credit score, are also not eligible for debt-support services like Reddit.
“For most people, we don’t think that there’s a need for this service,” said the Reddit employee who requested anonymity.
“Our goal is to get as many people as possible to use Reddit.”
Reddit is already facing criticism over its handling of its user-generated content.
The company recently banned the use of the terms “creepy faggot” and “bimbo”, among others, after an outcry over an image of an Asian woman in a bikini.
But it has also faced backlash over a recent decision to shut down its subreddit, r/fatpeoplehate, which contains content critical of fat people.
Reddit’s chief executive, Yishan Wong, defended the decision in a statement.
“Reddit is a community that allows people to connect with each other and express themselves freely,” Wong said.
“The actions we have taken this week are to keep the community safe.
Our community is open and free to discuss topics of concern, as long as they don’t offend.”