The DOJ vs. cash-advance app Dave
Personal-finance app Dave promised customers it would give them $500 cash advances (here’s one of its commercials), but the DOJ and FTC said that was false advertising.
The Justice Department said in a complaint that Dave targeted its ads to financially needy people, but according to the complaint, three-quarters of its new users got zero money and fewer than 1 in 45,000 were offered $500.
Those that did receive cash usually got $25, and to get that money instantly, had to pay an express fee of up to $25. Users were also charged a fee called a “tip” that was by default 15% of the advance without their consent:
“Consumers are either unaware that Dave is charging them or unaware that there is any way to avoid being charged. Dave also falsely suggests that, based on how much the consumer ‘tips,’ Dave will donate enough to charity to provide a specified number of meals to feed hungry children. In truth, however, Dave does not donate to charity as claimed, but instead makes only a token charitable donation—usually $1.50 or less—while keeping the bulk of the ‘tips’ for itself.”
Dave also charged users for an automatically renewing monthly subscription, according to the suit.
Dave denied the claims in a statement, saying the suit was an “example of government overreach and includes numerous allegations that are based on various inaccuracies.”
Those that did receive cash usually got $25, and to get that money instantly, had to pay an express fee of up to $25. Users were also charged a fee called a “tip” that was by default 15% of the advance without their consent:
“Consumers are either unaware that Dave is charging them or unaware that there is any way to avoid being charged. Dave also falsely suggests that, based on how much the consumer ‘tips,’ Dave will donate enough to charity to provide a specified number of meals to feed hungry children. In truth, however, Dave does not donate to charity as claimed, but instead makes only a token charitable donation—usually $1.50 or less—while keeping the bulk of the ‘tips’ for itself.”
Dave also charged users for an automatically renewing monthly subscription, according to the suit.
Dave denied the claims in a statement, saying the suit was an “example of government overreach and includes numerous allegations that are based on various inaccuracies.”
