In a sudden and shocking turn of events, Tally, a once-promising San Francisco startup that helped Americans pay off their credit card debt, has abruptly shut its doors.
The company, which had garnered significant attention for its innovative approach to debt management, left customers scrambling after it reportedly stopped making promised payments to their credit cards without warning.
Jason Brown, Tally’s co-founder and CEO, took to LinkedIn to announce the closure, describing the decision as “difficult and sad.” Despite the company’s efforts to revolutionize how consumers manage debt, Brown revealed that Tally ultimately folded because it was “unable to secure the necessary funding.” This marks a dramatic end to the company’s nine-year journey, during which it had raised $172 million from prominent venture capital firms, including Andreessen Horowitz. At its peak, Tally was valued at a staggering $855 million.
However, beneath the surface of Tally’s success story, there were signs of trouble. While investors were lauding the company’s potential as recently as October 2022, a Bloomberg report suggests that Tally had long been dealing with a slew of angry customer complaints, many of which were lodged with the Better Business Bureau (BBB). These complaints paint a troubling picture of a company that failed to deliver on its promises, leaving its users in a financial lurch.
Tally’s business model was straightforward on paper: the app would pay off the credit card debt of qualifying users by extending them a low-interest line of credit. Customers would then repay Tally through a consolidated loan with an annual percentage rate (APR) ranging from 7.9% to 29.9%. For many consumers, this seemed like a lifeline, especially with the average credit card APR sitting at 22.8% in 2023, according to the Consumer Financial Protection Bureau.
But as 2023 came to a close, Tally’s promises began to unravel. Numerous complaints filed with the BBB indicate that customers received letters in December 2023 informing them that Tally would no longer be paying off their credit cards. The reason? A loss of funding from investors. This abrupt halt left many users in a precarious financial position, still responsible for their original credit card debt while also owing money to Tally.
One disgruntled customer expressed their frustration in a BBB complaint dated July 15, writing, “Tally is a joke. Accepting new customers still even though I got a letter in 2023 stating they lost all funding and can no longer pay off my cards. Which resulted in my APR being higher than the cards they were paying for me.” The user demanded that Tally honor its original promise of a lower APR, emphasizing that the loss of funding was not their fault.
Another customer lamented that after receiving the letter from Tally, the company “did nothing to lower my APRs or payments as advertised. They just stopped paying my cards.” Yet another individual reported that Tally raised the interest rate on their loan higher than that of their credit card, leading them to pay more in interest than they would have directly to the credit card company.
These complaints are not isolated. Several other users have labeled Tally “a scam” and have even threatened the company with a class-action lawsuit. In response, Tally has issued generic replies on its BBB profile, stating, “In this case, we have responded directly to the consumer.” However, many of the complainants claim that Tally never actually reached out to them individually, leaving their concerns unresolved.
Tally had tried to broaden its appeal by targeting Gen Z credit card users through accessible, low-budget TikTok ads. These ads featured young actors and narrated scenarios that promised users an easy way to consolidate their credit accounts and pay them off at once with a lower interest rate. Yet, as the company’s collapse demonstrates, these promises were far from reality.
The Tally app remains available on Apple’s App Store, but the reviews tell a different story. Users have flooded the platform with one-star ratings, describing how the app fails to load, how they’re stuck paying exorbitant interest rates, and how they feel they’ve been scammed.
The downfall of Tally serves as a cautionary tale in the fintech world. What began as a beacon of hope for debt-burdened Americans has ended in disappointment and disillusionment. As the dust settles, the question remains: How did a company that once promised to ease the financial burdens of so many end up leaving them with even heavier loads to bear?
