C. Scott Brown / Android Authority
TL;DR
- The US Department of Justice has filed an amended complaint against fintech app Dave.
- The complaint alleges that Dave misled customers about potential cash advances of up to $500 and hidden fees.
- Dave has disputed the claims and has amended its fee structures since the original complaint was filed.
At a time of year when family finances can get stretched to the limit, the US Department of Justice (DOJ) is taking action against one personal finance app. Fintech app Dave and its CEO, Jason Wilk, are the subject of a scathing amended complaint that accuses the company of misleading financially vulnerable consumers with empty promises and hidden fees.
According to the DOJ, as earlier reported by Reuters, Dave lured users with bold claims of cash advances “up to $500” — a figure most consumers reportedly never saw. Instead, the complaint alleges many users received far smaller amounts or nothing at all. Users were also often hit with unexpected charges, such as “express fees” for instant access to funds and so-called “tips” that Dave automatically deducted without clear user consent.
Users were often hit with unexpected charges.
The accusations don’t stop there. The original complaint also calls out Dave for claiming that users’ tips would fund meals for needy children, showing heartstring-tugging visuals of cartoon kids and healthy meals. In reality, the DOJ alleges, only a small fraction of the money went to charity.
FTC Director of Consumer Protection Samuel Levine didn’t mince words, saying, “Dave targeted consumers struggling to make ends meet with false promises and surprise fees while profiting from their financial hardships.”
In response to the complaint, Dave announced a new fee structure earlier this month, ditching tips and express fees. The changes apply to new customers as of December 4, with existing users also able to move to the new plan. The company maintains that many allegations are inaccurate and intends to fight them in court.
The FTC’s original filing revealed just how lucrative these practices were for Dave, estimating the company raked in over $149 million from tips alone between 2022 and mid-2024. The DOJ is now seeking civil penalties, refunds for consumers, and a permanent injunction to stop similar practices moving forward. The case is now in federal court in California.
