Justice Department Files Action Against Dave Inc. For Misleading Consumers
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The Justice Department and the Federal Trade Commission (FTC) have filed a lawsuit against Dave Inc. and its Co-Founder, Leader, and Chairman, Jason Wilk. The lawsuit claims that Dave and Wilk have broken laws by misleading consumers and charging hidden fees. The lawsuit also revealed that the firm promised services on their app that were not true.
Dave Inc. is a financial technology company that offers short-term cash advances through its app. According to the government, the company deceived consumers by claiming it offered “up to $500” in cash advances without hidden fees. But the lawsuit highlighted that Dave rarely offers $500, and often does not give consumers any cash at all.
The Justice Department Accuses Dave Inc. Of Charging Hidden Fees
The lawsuit also claims that Dave charges an “express fee” to give customers instant cash advances. It revealed that the firm does not fully explain this added fee to users before they connect their bank accounts. This express fee, is part of the deception used by Dave to mislead its customers, according to the lawsuit.
Another issue raised in the complaint is the tip that users are encouraged to pay when using the app. Dave’s interface is unclear, which causes users to struggle to skip the tip. According to the lawsuit, the company also falsely claims that it will buy meals for needy children based on the size of the tip. However, in reality, Dave keeps most of the money for itself and only donates a small portion to charity.
The complaint filed in the U.S. District Court for the Central District of California also accuses Dave of violating the Restore Online Shoppers’ Confidence Act (ROSCA). The company allegedly signed up users for automatic monthly fees without clearly showing them the terms of the transaction or allowing customers to cancel easily.
Government Officials Commit To Protecting Consumers From Deceptive Practices
Brian M. Boynton, the head of the Justice Department’s Civil Division, said that the department is focused on protecting consumers from companies that trick them with misleading advertisements, hidden fees, and hard-to-cancel subscriptions. He stressed that the department will continue to enforce laws that protect consumers from such practices.
The lawsuit is an update to a previous FTC complaint that only named Dave as the defendant and did not ask for civil penalties. The Justice Department is now taking a stronger stance and including the company’s leader, Jason Wilk, in the legal action.
The case is being handled by a team of trial attorneys from the Civil Division’s Consumer Protection Branch, including Sarah Williams, Sean Z. Saper, and John F. Schifalacqua. They are working together with the FTC’s Bureau of Consumer Protection to take action against Dave Inc. and its executives.
