Financial app accused of taking hundreds of pounds from bank accounts

Families say they have had hundreds of pounds withdrawn from their bank accounts by an app offering personal loans.

Customers using the Tappily app have fallen into financial difficulty after the company took more than expected loan repayments from their bank accounts. Tappily has also ceased all new lending.

Users have taken to the review website Trustpilot to voice their grievances. They claimed the lender gave customers no notice before stopping any borrowing and sent customers a “generic” email notifying them of the change.

A customer said the loan freeze left him struggling to pay for basic necessities.

‘I paid £500 this morning so I could reduce my interest until I was paid in two weeks and settle the balance,’ they wrote. “I realized I needed it, but when I logged in, an error kept happening.

“This is outrageous and extremely unprofessional – and it will put a lot of people in financial difficulty. If I had known this, I would have kept my tenant’s rent instead of paying it to them. Now I have to find some funds 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 34p a day for every £100 they borrow.

It uses “open banking” technology to monitor its customers’ bank accounts, and when their balances exceed a certain level, the company automatically withdraws money from the account to repay the loan. However, customers have complained that excessive payments have been taken from their bank account.

“When you owe us money, we’ll automatically attempt to issue a refund when we see money coming into your bank account,” reads a description on the app’s website. Customers can set the maximum limit for each refund.

In a statement to customers released on Thursday, Tappily said it had taken the “reluctant” decision to temporarily halt all lending “until further notice” following an engagement with the Financial Conduct Authority, the city’s watchdog.

He said customers would not be “left with insufficient funds to meet your priority debts or other essential living expenses”. Customers can make manual repayments through the app to minimize interest.

The statement continued: “Over the past few weeks, Tappily has paid close attention to changes in customer behavior due to the current cost of living crisis.

“As a result and following the engagement with the FCA, we have reluctantly decided to temporarily halt loans until further notice.”

Tappily did not respond to repeated requests for comment. FCA has been approached for comment.