ACI Threatening Civial Litigation and baylift visits

[Terrance]

Hi back in 2023 I had brought a iPhone from giffgaff but was financed though klarna, I made about 4 monthly payments until the phone camera wasn’t functioning properly so request to return it to be fixed, it was then posted via Royal mail Tracked 24hr signed for, and was delivered / collected and signed for by gift gaff a couple day later, a few more days go by and I still don’t hear anything so I contact giffgaff to see what’s happening with my phone, they then told me they never received my phone and it wasn’t collected despite me having the proof of postage and proof of online tracking, they then told me to contact klarna about the issue but klarna told me they can’t do anything and giffgaff would have to resolve the issue despite them taking any responsibility for my phone somehow being lost, so I stopped paying my monthly payments, it was passed onto 3 different agencies for me not paying and have now received a letter almost 3 years later from ACI stating if I don’t pay the full amount or agree to a payment plan I will be taken to court and Baylifts will attend my home, I haven sent them the proof of me posting the item with the proof of postage receipt and the online tracking showing it was posted / delivered / collected & signed for and they are saying I still bare the responsibility for the item and need to pay the amount back and try and get my money from giffgaff despite it being over 3 years ago along with giffgaff not taking any responsibility for what’s happened to my device, I can’t pay as I don’t work and have no money to pay, am I still held responsible for this or are the trying to squeeze me to willing pay them despite me no longer having the device I payed for