Key Points
- U.S. Justice Department and FTC accuse Dave of deceptive practices in advertising and fee structures.
- The company allegedly misled consumers about cash advances, misused tips, and charged hidden fees.
- The legal action seeks monetary penalties and a permanent injunction to prevent future violations.
- The updated filing intensifies regulatory scrutiny by naming CEO Jason Wilk and seeking civil penalties.
The U.S. Justice Department, in collaboration with the Federal Trade Commission (FTC), has launched a civil enforcement action against financial technology company Dave and its CEO, Jason Wilk, for alleged violations of federal law. The complaint accuses Dave of misleading consumers through deceptive advertising practices tied to its personal finance app, including promises of cash advances up to $500 that many users reportedly never received.
The Justice Department seeks consumer redress, monetary civil penalties, and a permanent injunction to prevent future violations. The government alleges that Dave misrepresented its services, charged undisclosed fees, misused customer tips, and imposed recurring monthly charges without allowing customers to cancel subscriptions. The authorities argue that these practices harmed consumers and violated federal regulations.
In response, Dave has denied many of the allegations, asserting its intention to defend itself against the charges. The company has also introduced changes to its fee structure as part of a broader effort to address regulatory concerns. According to Dave, it has removed optional tips and express fees, which regulators previously criticized for being tied to immediate cash advance processing. The updated fee model applies to new customers onboarded since December 4, with existing users gradually transitioning to the revised system.
The filing amends and replaces an earlier FTC complaint lodged in November that solely targeted Dave and did not seek civil penalties. By including CEO Jason Wilk in the latest action and demanding monetary penalties, the Justice Department has intensified its scrutiny of the company’s practices.
This legal challenge underscores the growing regulatory focus on financial technology firms and their consumer-facing operations. Navigating this legal battle while maintaining consumer trust will be crucial for Dave’s future operations.
