US files complaint against fintech app Dave and its CEO
11:15 am Tuesday, December 31st, 2024
By Kanishka Singh
WASHINGTON (Reuters) -The U.S. Justice Department filed a complaint and announced a civil enforcement action on Monday against financial technology company Dave and its CEO Jason Wilk for alleged violations of federal law.
The Justice Department and the Federal Trade Commission alleged the company lured users to its personal finance app by advertising cash advances of up to $500 that many never receive.
The complaint, filed by the Justice Department, seeks unspecified amounts of consumer redress and monetary civil penalties from the defendants and a permanent injunction to prohibit them from engaging in future violations, the Justice Department said.
The government alleges that Dave misled consumers by deceptively advertising its cash advances, charging hidden fees, misrepresenting how Dave uses customers’ tips and charging recurring monthly fees without providing a simple mechanism to cancel them.
Dave says many of the claims are incorrect and it will defend itself. It is also rolling out a streamlined fee structure that was unveiled earlier to remove tips and “express fees”, which regulators allege it charged customers to get cash advances instantly.
New customers onboarded on or after Dec. 4 have been transitioned to this revised fee structure, Dave said on Tuesday, adding that existing customers are also shifting.
The complaint filed on Monday amends and replaces an earlier complaint that the FTC filed in November, which had named only Dave as a defendant and did not seek any civil penalties.
(Reporting by Kanishka Singh in Washington and Niket Nishant in Bengaluru; Editing by Chris Reese, Aurora Ellis and Devika Syamnath)
