FTC sues fintech app Dave over misleading $500 cash advance ads

By Jody Godoy

 

(Reuters) - The U.S. Federal Trade Commission sued financial technology company Dave Inc in Los Angeles on Tuesday, accusing it of luring users to its personal finance app by advertising cash advances of up to $500 that many never receive.

 

Very few users are offered the full amount advertised, and many are not given an advance at all, the FTC said in the lawsuit filed in federal court.

 

The app appeals to users facing financial hardship but does not make users aware upfront that it charges a fee of up to $25 to receive the cash instantly and a monthly $1 fee, the FTC alleged. Dave also collects hard-to-avoid "tips" on transactions and misrepresents that the money is used to purchase meals for children in need, the FTC said.

 

Dave said many of the claims are incorrect and it will defend itself.

 

(Reporting by Jody Godoy in New York; Editing by Lisa ShumakerEditing by Chris Reese)