On November 5, 2024, the FTC took action against online cash advance app Dave for allegedly using misleading marketing to deceive consumers about the amount of its cash advances, charging consumers undisclosed fees, and charging so-called “tips” to consumers without their consent. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said that Dave lured in consumers living paycheck-to-paycheck with false claims of big-dollar advances, then reached into their pockets to give itself a so-called ‘tip’.
The FTC charges that Dave misled consumers with advertising claiming they could receive "up to $500" instantly. In reality, few users received the full $500, and access to funds was not always immediate. To get instant access, users were required to pay an undisclosed "Express Fee" of $3 to $25, revealed only after signing up and granting bank access. Additionally, Dave charged a surprise 15% "tip" fee on advances, further adding to the undisclosed costs.
In addition, Dave misled consumers by displaying a cartoon of a child and offering options like “10 Healthy Meals” in exchange for a "tip," suggesting that the tip would fund actual meals for those in need. However, the FTC claims that for every tip percentage selected, Dave only donates 10 cents per tip and keeps the rest of the money, deceiving consumers about the charitable impact.
The complaint charges that Dave’s conduct violates the FTC Act and the Restore Online Shoppers’ Confidence Act.
Read the FTC’s press release here.
Read the complaint here.