Parents and former members have accused an evangelical church operating in south London linked to the Conservative party of forcing young members into handing over thousands of pounds and pressing them into debt.

Spac Nation says it focuses on disenfranchised black youth, taking them away from gang culture, but alarmed mothers say it is operating “like a cult” and that pastors encourage its members to take out multiple loans for the church.

The mother of one member told the Guardian that her 20-year-old daughter had given £13,000 to the church in three months, with the money raised from her student loan, personal loans and loans on businesses she had set up with the help of pastors.

“She must have made about 30 loan applications,” said the mother, who asked not to be named because she was concerned about her daughter’s safety. “For some of them, she was using my details as a guarantor. She was even using me as a guarantor for other people’s loans. That was the one time I was glad my credit was bad.”

The controversial church has adopted the local Conservatives, supporting the party in the marginal Croydon Central seat. Last week, one of its pastors, Jayde Edwards, unsuccessfully stood for the party in a council byelection.

The Conservatives have been keen to embrace the church. Edwards sat one place away from Boris Johnson during the Conservative party conference and its lead pastor Tobi Adegboyega was also present.

The Charity Commission said “a number of serious allegations have been raised with us about the charity Spac Nation” and a regulatory compliance case “examining governance matters at the charity” was ongoing.

“We are assessing the charity’s response to the action plan – and any new evidence of concern – in considering our next regulatory steps,” a spokesperson added. Claims against the church were previously reported by Inside Croydon and HuffPost UK last week.

Steve Reed, who is hoping to be re-elected as Labour MP for Croydon North, met police on Monday to discuss the allegations, but the church says it is the victim of “a political smear campaign” and there is no evidence of wrongdoing. The Metropolitan police declined to comment.

The mothers of two young women who are now pastors in the church told the Guardian their daughters had joined the church around the time that they went to university and had been pressurised into handing over their student loans.

Members are encouraged to “sow seed” or donate to the organisation. One showed a bank statement, seen by the Guardian, revealing that her daughter had paid out her entire student loan instalment on the day that she had received it to an account that her mother said was connected to the church.

The second mother said that correspondence arriving at her house indicated that her daughter had taken out other borrowing. “After that, we started having mail coming to our home in my daughter’s name calling for payments on loans,” she said.

The Guardian has seen a sheaf of letters from credit card companies, banks and debt collection agencies, demanding repayment on loans totalling around £6,000. “That’s just the ones we know about,” the mother said.

Spac Nation is a black majority church whose Sunday services attract up to 1,000 people, mostly aged under 30. Accounts lodged at the Charity Commission show it had income of £1.17m and expenditure of £1.19m in 2018.

It borrows the imagery of urban music and the terminology of gang culture to attract young members. Some members live in shared “trap [Take Risks And Prosper] houses” rented by the church.

Facebook Twitter Pinterest Tobi Adegboyega has been living in a luxury property on a private estate in Surrey. Photograph: Steve Finn/Steve Finn Photography

Its leader, Adegboyega, leads an affluent lifestyle and has been living in a luxury property on a private estate in the Surrey stockbroker belt where residents reported seeing him driving Lamborghini and Rolls-Royce cars.

Both mothers described the effect of Spac Nation on their daughters as like that of a cult, explaining that the girls had become alienated from them, as well as their siblings and friends who were not involved in the church.

A WhatsApp chat between one woman and a pastor, obtained by her mother and seen by the Guardian, showed how a senior member demanded money.

A separate document showed how it appeared the same woman had adopted a secretary role for a “line” of congregants, keeping tabs on how much money each was contributing, how they were getting it and suggestions to give them on where to obtain more.

Daniel Ogoloma, a Spac Nation spokesperson, said that the church’s work in the community “has helped change many lives, and has helped reduce violence”. Critics, such as Reed, were making allegations that “cannot be substantiated with any proof or concrete evidence” and that “they are causing a stir by spreading hearsay”.

He added: “We understand also that parents and their children can have issues ranging from financial issues to emotional issues. As a church, we deal with a lot of these and we can only give advice to them and cannot force any solutions.”

Facebook Twitter Pinterest Jayde Edwards, centre, with Shaun Bailey, the Conservative mayoral candidate, left, and Mario Creatura, far right. Photograph: -

Vilanda Nagyte, a former member of the church, publicly condemned the church last week on Twitter, saying pastor had opened two business accounts in her name and rented out a “trap house” in her name.

Reed said he was “inundated” with complaints after he began to raise concerns about Spac Nation.

“Former members tell me it operates like a cult, targeting vulnerable young people, isolating them away from their families in houses they control, then pressuring them to take out multiple bank loans and hand over the money,” he said.

Edwards was nominated with the support of Mario Creatura, a former Downing Street aide who is the party’s candidate for the marginal Croydon Central in the forthcoming general election. In the picture of Edwards and Johnson at last party conference, Creatura appears a row behind.

Dozens of Spac Nation members turned out to support Edwards and the Conservatives in the early phases of the council byelection campaign, although Spac Nation members were not present on election day last week.

Reed said he was concerned that Creatura, who has been frequently pictured with Edwards in recent weeks, and the Conservatives had “not performed basic background checks” on Spac Nation, before allowing them to act as leafleters and canvassers in Croydon. Creatura declined to comment.

The two mothers said several other mothers from the same community had told them their children have been recruited into Spac Nation. “Our belief is because 98% of the congregation are black children that is why the police have done nothing,” said one. “If it was white children in this group they would shut it down right now.”

• This article was amended on 15 November 2019 because an earlier version said claims against the church were “first reported by HuffPostUK”. There was an earlier report by Inside Croydon.