
The Justice Department in conjunction with the Federal Trade Commission (FTC) has initiated a civil suit against fintech company Dave Inc. (Dave) and its co-founder and CEO Jason Wilk, per a recent press release. Dave, known for providing short-term cash advances through its app, and Wilk are accused of misleading promotional practices, unexpected fees, and deficient explanations on customer tipping, breaching the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).
Filed in the U.S. District Court for the Central District of California, the complaint asserts that Dave's promises of providing "up to $500" in cash advances are seldom fulfilled – consumers often receive far less or even nothing. In addition, the lawsuit alleges the company charges an "express fee" that isn't disclosed upfront. As reported by the Office of Public Affairs, consumers tempted to offer a "tip" for the service are reportedly misled by a user interface that doesn't transparently show how to not tip or inaccurately represents the impact of their tips on charity contributions.
According to the Office of Public Affairs, Dave also stands accused of making it unduly difficult for customers to opt-out of recurring monthly charges, going against ROSCA requirements. The Justice Department's lawsuit seeks consumer redress, an unspecified amount in monetary penalties, and a permanent injunction to prevent future violations. This action updates and supersedes an initial FTC complaint that named only Dave Inc. and did not include requests for civil penalties.
"The Justice Department is committed to stopping companies and their executives from preying on financially vulnerable consumers with deceptive advertisements, hidden fees and subscriptions that are difficult to cancel," said Principal Deputy Assistant Attorney General Brian M. Boynton, as stated by the Office of Public Affairs. Further legal proceedings are expected to elaborate on the alleged malpractices by Dave and Wilk and aim to safeguard consumer interests as outlined in existing federal statutes.
Leading the legal charge, Senior Trial Attorney Sarah Williams, Trial Attorneys Sean Z. Saper and John F. Schifalacqua, along with Assistant Director Zachary A. Dietert, are handling the case. They are working in tandem with the FTC’s Bureau of Consumer Protection. For those interested in the case specifics or consumer protection measures, additional information is accessible via the official Consumer Protection Branch website.