UK: A financial app is accused of stealing hundreds of pounds from bank accounts

Personal loan app ceases all new lending following engagement with City watchdog.

Family members claim that hundreds of pounds have been taken from their bank accounts through an app offering personal loans.

Tappily customers have experienced financial difficulties after Tappily took more than they expected from their bank accounts. Tappily also stopped all new lending.

Trustpilot reviews site was used by users to voice their grievances. The lender claimed that it had not given notice to customers before suspending any borrowing and that it had sent customers a “generic email” to inform them.

One customer claimed that the freezing of lending had left them unable to pay basic necessities.

They wrote that they had paid £500 to keep my interest low until I get paid in two weeks’ time. “I realized I needed some back, but when I tried to log on an error kept popping up.

This is unprofessional and outrageous. It will cause financial hardship for many. If I had known, I would have paid the rent to my lodger rather than paying it. Now, I need to find the funds to buy groceries each week.

Tappily provides credit facilities to customers that they can access at any time. For every £100 borrowed, the firm charges 34p per day.

The firm uses “open banking” technology that monitors customers’ bank accounts. When their balances exceed a certain amount, it automatically withdraws money from the account to pay off the loan. Customers have complained about excessive payments being taken from their bank accounts.

The app’s website describes the process as “If you owe money to us, then we will automatically try to make a repayment whenever we see money in your bank account.” Customers can decide the maximum amount they will pay for each repayment.

Tappily issued a statement to customers on Thursday, stating that it had taken the “reluctant decision” to suspend all lending temporarily “until further notice” after engaging with the Financial Conduct Authority (the City watchdog).

According to the app, customers will not be “left without sufficient funds to pay your priority debts or any other essential living expenses”. To reduce interest, customers can use the app to make manual payments.

The statement continued, “Tappily has been paying close attention in recent weeks to changes in customer behaviour as a consequence of the current cost-of-living crisis.

“As a consequence of this engagement with the FCA, we have reluctantly decided that we will temporarily cease lending until further notice.”

A spokesperson for the FCA stated that the watchdog was aware of the complaints.

He stated that the firm should not be making payments to customers if they have reason to believe they don’t have enough money or that it would make it more difficult for them to borrow.

“With rising living costs, we know that consumers will be more inclined to use the credit market.

“Firms should only lend money to those who can afford it and treat each person fairly.” We have reminded them and will continue to do so.”

What is Tappily?

Tappily gives you ongoing access to an agreed amount of credit that you can draw on at any time – by transferring money to your current account. Tappily only charges you when you borrow, so it’s a free facility when you’re not borrowing. Tappily was launched in 2017 as a sister company to SafetyNet Credit (which also offers a revolving credit service).

Compared to SafetyNet credit, Tappily initially offered higher credit limits and lower rates, but was marketed at customers with slightly better credit scores. More recently, the company behind both brands has begun to put the majority of its weight behind Tappily.

How much does Tappily cost?

Tappily charges daily interest when you borrow at a rate of 0.34% per day. That’s £0.34 for every £100 borrowed. There are no other fees or charges.

For example, if you borrow £150 for four days, the interest per day would be £0.51 and the total interest would be £2.04 representing four days at £0.51 per day

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