US Announces Civil Enforcement Action Against Fintech App Dave and Its CEO

The United States Department of Justice (DOJ) and the Federal Trade Commission (FTC) have announced a civil enforcement action against financial technology (fintech) company Dave Inc. and its CEO, Jason Wilk. The action, filed on Monday, alleges that Dave lured users to its personal finance app by advertising cash advances of up to $500 that many never receive. The complaint also alleges that Dave charged hidden fees and misrepresented how it uses customers' tips.



The complaint, filed by the DOJ, seeks unspecified amounts of consumer redress and monetary civil penalties from the defendants, as well as a permanent injunction to prohibit them from engaging in future violations. The agencies allege that Dave's deceptive marketing practices and hidden fees violated federal law.

The complaint alleges that Dave induced app users to pay a sizeable "tip" on cash advances by using a deceptive interface that does not offer a clear way to avoid tipping. Additionally, the complaint alleges that Dave charged users a monthly membership fee without providing a simple mechanism for consumers to cancel those recurring fees.



Dave Inc. provides a suite of financial products and services through its financial services platform, including a budgeting tool, short-term liquidity alternative, job application portal, and paid surveys. The company also offers Dave Banking, a digital checking and demand deposit account. Dave was founded in 2015 and is headquartered in Los Angeles, California.

The civil enforcement action against Dave Inc. and its CEO Jason Wilk serves as a reminder to fintech companies that they must adhere to consumer protection laws and regulations. As the fintech industry continues to grow and innovate, regulators are paying close attention to ensure that companies are treating consumers fairly and transparently.

The increased scrutiny of fintech companies, as demonstrated by the regulatory action against Dave, can significantly impact their business models and consumer trust. Fintech companies must prioritize transparency, clear communication, and ethical business practices to maintain consumer trust and avoid regulatory consequences that could disrupt their operations. As the fintech industry continues to evolve, regulators will likely play an increasingly important role in shaping the sector's future and ensuring that consumers are protected.