The US Justice Department has sued UK fintech Dave and CEO Jason Wilk, alleging false promises of cash advances to users.
The Justice Department’s lawsuit seeks an undisclosed amount in consumer compensation and civil penalties, along with a permanent injunction to prevent future violations by the defendants.
Dave is accused of misleading consumers through deceptive advertising of cash advances of up to $500, charging hidden fees, misrepresenting how customer tips are used and imposing recurring monthly fees without an easy cancellation option.
On Dave’s website, there is a section titled “no hidden fees,” in which it states: “You work too hard for your money to spend it on fees. That’s why we give you banking with no minimum balance fees or ATM fees.”
There is also advertising encouraging users to submit their email addresses with the promise of “getting up to $500”.
In response to the lawsuit, Dave has stated that many of the claims are inaccurate and it plans to defend itself. The company is also implementing a simplified fee structure, which eliminates tips and express fees previously charged for instant cash advances.
Furthermore, Dave confirmed that all new customers since 4 December have been moved to this updated fee model, with existing customers also transitioning to the new structure.
As reported by Reuters, the complaint amends and replaces an earlier one filed by the FTC in November, which only named Dave as a defendant and did not seek civil penalties.