Families say hundreds of pounds have been debited from their bank accounts by an app that offers personal loans.
Customers using the Tappily app have run into financial difficulties after the company took more than expected repayments from their bank accounts. Tappily has also stopped all new loans.
Users have visited the Trustpilot website to voice their grievances. They claimed that the lender failed to give customers notice before terminating all loans and sending customers a “general” email informing them of the change.
A customer said the credit freeze had left them have difficulty paying for basic necessities.
“I paid £500 this morning so I could keep my interest low until I was paid in two weeks and cleared the balance,” they wrote. “I realized I needed some of it, but when I signed up, an error kept popping up.
“This is outrageous and extremely unprofessional – and will put many in financial trouble. If I had known this, I would have kept my tenant’s rent instead of paying them. Now I have to find money to make sure I can do my shopping every week”
Tappily offers its customers a credit facility that they can access at any time. The company charges users 34 pence per day for every £100 they borrow.
It uses “open banking” technology to monitor their customers’ bank accounts, and when their balance exceeds a certain level, the company automatically withdraws money from the account to pay off the loan. However, customers have complained that excessive payments have been debited from their bank account.
“If you owe us money, we will automatically attempt to issue a refund when we see money in your bank account,” reads the app’s website. Customers can set the maximum limit for each redemption.
In a statement to customers released Thursday, Tappily said it had made the “reluctant” decision to temporarily suspend all lending “until further notice” after consulting with the city’s watchdog Financial Conduct Authority.
It said customers would not “be left with insufficient funds to meet your priority debts or other essential living costs”. Customers can manually repay through the app to minimize interest.
The statement continued: “Tappily has been paying close attention in recent weeks to changes in customer behavior as a result of the current cost of living crisis.
“As a result, and following an agreement with the FCA, we have reluctantly decided to temporarily suspend lending until further notice.”
Tappily did not respond to repeated requests for comment. The FCA has been contacted for comment.