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July 2022 – SafetyNet Credit halts lending after FCA restrictions

UPDATE – In January 2023, Indigo Michael, who operates the SafetyNet Credit and Tappily lending brands, went into administration.

See SafetyNet Credit goes into administration for a description of SafetyNet Credit’s previous lending and what is expected to happen in the administration. This is bad news for customers hoping for a refund for unaffordable lending.

The rest of this article is kept as background.

SafetyNet Credit (SNC) is very expensive - now it has stopped lending after the FCA imposed restrictionsIn July 2022 the Financial Conduct Authority imposed major new restrictions on Indigo Michael, the company that owns the SafetyNet Credit brand.

SafetyNet Credit (SNC) temporarily stopped lending in July for a few days. Customers were told on 13 July 2022 by email:

SafetyNet has in recent weeks been paying close attention to the significant changes we have seen in customer behaviour as a result of the current cost of living crisis. As a result of this and following engagement with the FCA we have decided to temporarily stop all lending until further notice.

That makes it sound as though SafetyNet Credit made this decision…  but it probably had little choice.

On 15 July customers were told that lending had restarted. But by mid September it was no longer possible to apply for credit on their website. If you try you are given the message
“Thank you for choosing SafetyNet. Unfortunately, your
application was unsuccessful as it does not meet SafetyNet’s lending criteria.”

The new FCA restrictions

The FCA has brought in 7 new restrictions on SafetyNet Credit.

My summary of these is:

  • when setting a credit limit, SNC must assume the full repayment will be taken and check that the lending would be affordable if this is done.
  • SNC must not use a CPA to take repayments where there are insufficient funds in the account or taking the payment would leave insufficient funds for priority debts or other essential living expenses, leading to the customer borrowing further from SNC or another firm, or entering their overdraft facility to meet such expenses.
  • SNC must explain to customers how its use of CPA is changing.
  • where a customer may miss a minimum repayment, SNC should contact the customer explaining why the CPA has not been used and invite them to make a payment or offer to freeze interest and accept a lower payment.
  • stop objecting to complaints brought by claims companies unless it has specific evidence to support this.

What should SNC customers do?

If you currently owe a balance

The first email from SNC explained that it has paused taking any payments from your bank account. It pointed out that you can make a payment to them manually to minimise the interest that is being added.

But from 15 July, SNC has restarted not just lending but also taking money from your account. SNC says:

Repayment will still be made using Continuous Payment Authority (CPA) but will now be capped against new affordability criteria. Customers who wish to pay more than the sum restricted by cap will be able to do so via the product dashboard.

If you can simply clear your current balance and not be left so short that you have to borrow again from some other lender, then that is your best option.

Clear the account and close it is my suggestion!

What is important is that SNC interest is “capped” – after 40 days no further interest will be added.

So if you cannot afford to clear the whole balance now, you do not need to worry about huge amounts of interest being added every month – after 40 days it becomes interest-free from that point.

If you are struggling to pay your bills and essential expenses at the moment, read Can’t pay your bills & debts? What help can you get? and talk to a debt adviser about your options. Expensive credit such as SafetyNet Credit may get you through to the next month, but it isn’t helping you clear your debts.

Consider an affordability complaint now

NB this may now be pointless as SafetyNet Credit has gone into administration 

If you have borrowed repeatedly from SNC for more than a few months then you should consider making an affordability complaint. This applies if you still have an active account, if a balance is being paid in a debt management plan or you no longer owe anything.

If you win this, you will get a refund of some of the interest you have paid.

You don’t have to use a claims company to do this. You can treat it as a payday loan complaint and use the free template letter here.

SNC’s complaint handling has been very poor recently. My guess is now the FCA is watching, they will be trying to a lot better! But if you don’t get a reasonable offer, send it straight to the Financial Ombudsman.

Also look at affordability complaints about other expensive credit you have had:

SafetyNet Credit goes into administration

Problem debt look at a DRO

Could a Debt Relief Order help you?

refunds from overdraft charges

Can you get an overdraft refund?

Comments

  1. Clare Smith says

    I have literally just had an email from them saying they are now starting lending again with there usual checks etc.

  2. Mike_p says

    I got stuck with them and they were terrible. I transferred some money to my account to cover some upcoming bills and before I knew it they’d taken all but £50 and I had to borrow again to cover them.

    Thanks to this site I’m now well clear of the payday loan trap and am on well on the way to clearing my other debts with a debt managment olan.

    • Sara (Debt Camel) says

      Yes, the same FCA restrictions apply and so far as I know, lending has also been paused.

  4. Ian says

    I have this account and signed in today. There is a notice that they are resuming lending now

    • Sara (Debt Camel) says

      yes, a couple of people have also reported getting an email about this. The article above has now been updated!

  5. Dave says

    Hi Sarah,
    I had an affordability complained accepted by SNC last week, I have agreed the amount and am awaiting payment. Can you see any reason that what’s currently happening with SNC would affect this?
    Thanks

    • Sara (Debt Camel) says

      no I don’t think it should. They have resumed lending – there is no sign they are about to go into administration.

      • Dave says

        That’s good to hear. Thanks by the way, I only contacted SNC after seeing it on this site and they have refunded every bit of interest plus interest on top. So it was definitely worth doing.

    • Kate says

      Hi Dave
      I am still awaiting my outcome from SNC,they have had 10 weeks now so going to go to FOS. Can I ask was you happy with your outcome of them ? Thanks

      • Bill says

        I’ve put a complain in the SNC 5 weeks ago, they’ve acknowledged it pretty quick the following day but upto today I got a notification from my credit file showing up SNC, I contacted them as my account closed 18 months ago with no balance to pay, told me they need to look at my bank account, I allowed them but confused as to why would they want access seeing I have no outstanding funds I owe?

    • Kate says

      I am still waiting a final response from SNC they have until the 30th August then I’m taking it to the FOS. I have looked at what I paid back to them in interest and it’s just over £4000, I’m not holding out any hope of anything back but I will just have to wait and see the outcome

        • Sara (Debt Camel) says

          are you waiting more than 8 weeks for a reply from SNC? Don’t! Send it straight to the Ombudsman at 8 weeks.

  6. Jo.K says

    I made a complaint to Tappily & SNC exactly 13 weeks ago. At the 8 week mark I got the email that they have not been able to complete investigations. I sent my complaint to the ombudsman on the 8th week and received a response asking me for borrowing details. I asked Tappily and Safety for this information 3 weeks ago and every week since and til this day they have not sent me the information.

    I have made the ombudsman aware of this but I hope it doesn’t go against me as Tap/SNC won’t give me the information.

  7. Andrew says

    Hello,
    I was wondering if you could help me/offer advice.
    I approached SafetyNet Credit through resolver in September of this year as I had a payday loan with them from 2015-2021.
    At the time of taking the loan I had a horrendous gambling habit, I acknowledge my gambling is my problem but I had filed a complaint of irresponsible lending as at the time of lending me the money I had multiple gambling transactions on my bank statements amounting to hundred of pounds every month. In a matter of months they had increased my limit from £300 to £800 and then £1000. I was stuck in a loop of borrowing £1000 every month and repaying £1250+ for five years. SafetyNet did not reply within the 8 week period and when I chased them they told me to go to the FOB, I think this was a clear indication they never intended to reply to me. I have since taken it to the FOB but was wondering if you could tell me if it is likely I will be successful? the reason I ask is I was never going to bother going through this process as I suffer with chronic anxiety, the gambling helped me forget about it. I am dealing with the anxiety now and no longer gamble but the lasting effects are horrendous. I don’t want to frag myself through the emotional turmoil just to be unsuccessful.

  8. Carl says

    I’ve heard from them. They deny any responsibility, despite me having multiple payday loans and living in my overdraft for nearly FOUR YEARS :(

    • Carl says

      Sent to the ombudsman. Sadly it looks like I’ll be waiting around 5 or 6 months to hear anything. Leaves me in a precarious position financially as the crutch of Safetynet is no longer there. Back to back breaking overtime again :(

      • Sara (Debt Camel) says

        have you looked at a debt management plan to get you into a safe position? Things don’t look as though they will get any easier in 2023…

        Also look at making a complaint about your overdraft, see https://debtcamel.co.uk/get-refund-overdraft/
        And payday loans – some of the lenders are still around to claim from, if you can list who you used?
        And what other high cost borrowing have you had?

        • Carl says

          I’ve had a response from the ombudsman and they have upheld my complaint fully and told SNC to pay back all interest paid plus the 0.8% on that. Given them until the 20th January to answer. Fingers crossed they haven’t sunk by then :(

  9. Darren Mallinson says

    Looks like SafetyNet are going through loans and offering paltry sums to make it look like this is all the customer is getting:

    “Due to a recently identified process issue, we have had to review your account in line with our affordability assessment. As a result, you will receive £10.34 which will either be written off your SafetyNet balance or sent directly to you. This amount includes statutory interest.
    In line with HMRC guidelines, the HMRC figure of £0.10 has been deducted from the statutory 8% interest figure and will be paid to HMRC on your behalf, so you do not have to declare this redress in your tax returns.”

    A full £10.34. Not the £4000 plus that they owe (fees, interest and statutory interest) but I suspect it’s a ploy to get people to believe that’s all they’re going to pay. Mine’s with the FOS and has been since September so hopefully sorted before they have a chance to set up a scheme of arrangement.

  10. gemma says

    I’m due a refund from safety net credit as I filed a complaint with them through charterhouseclaims,I received a letter from snc offering me an redress/refund which I accepted on the 22.12.22 but have not received refund.i emailed and talked to to snc on livechat as the say there is a delay in refunds due to the holiday period and it should be with me ASAP.but now I find that snc are struggling and could be going bust as they have called insolvencys to help. How likely now with all this going on will I get my refund??

    • Sara (Debt Camel) says

      I think you will have to wait and see. No one knows what is going to happen at the moment.

      • Gemma says

        Hi no joy yet spoke to live chat this morning and they said they apologised for the delay in my redress and that is due but there is no time frame on when it’s due.
        I also sent charterhouseclaims an email as I worried I’m gonna have to pay them they fee as they have done their work and got me a refund but as I haven’t received yet I cannot pay them as I have no money in bank
        Also what happens is safetynet credit goes bust and I don’t receive this refund will I have to pay charterhouseclaims a fee ?

          • Matt says

            I accepted a redress payment on 28/12/2022 called and gave my bank details said they can’t give timeframe for refund called them again and I asked are you refunding agent said they don’t know whats happening and to give it a week then call back but can’t confirm anything

  12. Gemma says

    No I don’t owe saftynet credit any money I paid my credit off ages ago.i was contacted by charterhouseclaims as they helped me get a refund from lendingstream successfully and I got tht refund straight away and they said I should try and claim back my money from snc as I had been subjected to irresponsible lending by snc that caused me to be great debt

    If I was to get this refund from snc for £1000.43 charterhouseclaims will take a fee from it but I don’t know how much yet but if I don’t get this refund I don’t no if I will still have to pay a fee which I know I won’t be able to pay as I’m on universal credit and don’t get that much money cos I was thinking the fee will properly be about 400 to 500quid but not sure.

    • Sara (Debt Camel) says

      if you don’t get the refund, there won’t be a fee.

      It can’t be more than 30% + VAT (so 36%) under FCA regulations.

      Do you have now or have you had in the last few years other high cost debt you could make a claim against without using a claims company? All they do is send a standard complaint and you can get a template for free on this site.

  13. Gemma says

    Safety net credit has gone into administration as of today….
    Indigo Michael Limited (trading as SafetyNet) in Administration
    On 9th January 2023 Joe O’Connor, Clare Kennedy and Simon Appell of AlixPartners were appointed Joint Administrators of the Company.

    The affairs, business and property of the Company are being managed by the Joint Administrators who act as agents of the Company and without personal liability.

    The Administrators are authorised to act as insolvency practitioners by the Insolvency Practitioners Association
    The Joint Administrators will work with the Company to stabilise its operations. As part of this process, and to ensure that any impact on customers is minimised, the Joint Administrators will enable the Company to continue to provide lending facilities to some existing customers in accordance with the Company’s current lending practices for a defined period of time.
    What happens if I submitted a complaint against the Company prior to the Joint Administrators’ appointment?
    The Company has received a number of complaints (from a minority of customers), some of which are still in the process of being reviewed. Once these claims are assessed we will contact customers to advise of the outcome via a final response and explain what that means for them.

  14. Gemma says

    Will I be paid if I have an unsecured claim against the Company?
    Unsecured claims are paid after the costs of the administration, amounts owing to secured creditors and certain other statutory amounts.
    At present the Joint Administrators are not able to confirm whether a dividend (i.e. any cash) will be available to unsecured creditors in this case, however current analysis suggests that this is highly unlikely meaning that there is very little prospect of recoveries for unsecured creditors.
    I have previously submitted an unaffordability claim to the Financial Ombudsman Service (FOS) which has not been finalised nor agreed. What will happen to my claim?
    Any claims which were being handled by the FOS are likely to now be handed back to the Joint Administrators who will assess it in due course. You do not need to resubmit your claim. Once these claims are assessed we will contact customers to advise of the outcome via a final response and explain what that means for them.
    So it doesn’t look good probably never see this refund to be honest just a waiting game now …..I just don’t understand why they gonna still lend money to certain people but not pay out refunds to people who claimed before it went into administration.
    I confused can someone explain please

  15. Sandra says

    Just had following email from safety net

    customers and will be updated when further information becomes available: safetynet.credit As per the FAQs on the website, customers will be able to access either their full credit limit or a reduced limit equal to the highest amount they have borrowed in the last 30 days (i.e on or after 10 December 2022). As a result your credit limit has been reduced to £450. Credit limits are likely to be reduced further in the future and you will receive separate communications in respect of this at the relevant time.
    Kind regards,

  16. Sandra says

    9 Jan at 19:07

    Indigo Michael Limited (trading as SafetyNet) – in Administration (the Company)

    Dear Customer,

    On 9th January 2023 Joseph O’Connor, Clare Kennedy and Simon Appell of AlixPartners were appointed Joint Administrators of the Company.

    The affairs, business and property of the Company are being managed by the Joint Administrators who act as agents of the Company and without personal liability. The Joint Administrators are authorised to act as insolvency practitioners by the Insolvency Practitioners Association.

    The Company’s website provides further information about the Administration for customers and will be updated when further information becomes available: safetynet.credit As per the FAQs on the website, customers will be able to access either their full credit limit or a reduced limit equal to the highest amount they have borrowed in the last 30 days (i.e on or after 10 December 2022). As a result your credit limit has been reduced to £450. Credit limits are likely to be reduced further in the future and you will receive separate communications in respect of this at the relevant time.

    Kind regards,

    • Kate says

      As per the FAQs on the website, active customers who have used their facilities within the 30 days preceding the Administration (i.e. on or after 10 December 2022) and who currently have no arrears on their account will continue to have access to their existing facilities.

      As you have not used your facility in this period, you will no longer be able to borrow and should consider this email as your two month’s written notice to terminate your agreement as per clause 6.5. You can find a copy of your credit agreement on your dashboard. Please get in touch if this causes you significant issues.
      My email from SNC last night

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