Fintech Company Dave Faces Legal Heat Over Deceptive Marketing Tactics
The US Justice Department has taken civil enforcement action against fintech company Dave and its CEO Jason Wilk, accusing them of engaging in deceptive marketing practices that misled consumers about cash advance amounts and charged them undisclosed fees.
Misleading Consumers with False Promises
According to the complaint filed by the Federal Trade Commission (FTC) in November 2024, Dave and its co-founder Wilk deceived customers with their marketing strategies, charging them so-called “tips” without their consent. The amended complaint now includes Wilk, who also serves as the company’s board chair, as a co-defendant.
False Advertising and Hidden Fees
The DOJ alleges that Dave and Wilk falsely advertised instant cash advances of “up to $500” without hidden fees. However, the complaint suggests that consumers rarely receive the full amount, sometimes receive no advance at all, and are charged an “express fee” for instant access, which is not clearly disclosed. This has resulted in hundreds of millions of dollars in surprise fees being levied on consumers, who are often unaware of these charges or how to avoid them.
Violations of FTC Act and Restore Online Shoppers’ Confidence Act
The charges against Dave and Wilk include violations of the FTC Act and the Restore Online Shoppers’ Confidence Act. The Justice Department is seeking refunds for consumers, civil penalties against the defendants, and a court order to halt the company’s alleged unlawful practices.
Protecting Consumers from Unlawful Practices
FTC Bureau of Consumer Protection director Samuel Levine stated, “Dave has targeted consumers facing financial challenges with false promises of quick cash while pocketing surprise fees, including by paying itself a so-called ‘tip’. Today, the DOJ and FTC have shown their commitment to work together to protect consumers from these unlawful practices.”
A Warning to Fintech Companies
This legal action serves as a warning to fintech companies to prioritize transparency and honesty in their marketing practices, ensuring that consumers are not misled or taken advantage of. As the fintech industry continues to grow, it is essential that companies operate with integrity and respect for their customers.
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