The start of 2025 has been challenging for the fintech company Dave and its CEO, Jason Wilk. The United States Department of Justice (DOJ) has filed a civil enforcement action against the startup and its CEO. This lawsuit is based on a case previously brought by the Federal Trade Commission (FTC), which accused the company of deceptive marketing practices in its personal finance app and cash advance services.
The core of the lawsuit is the allegation that Dave's advertisements misled consumers about the terms of its cash advance service. The company promoted the ability to instantly receive "up to $500," but according to the DOJ, most users did not receive this amount, and some received nothing at all. Additionally, consumers allegedly faced unexpected "expedited fees" when trying to quickly access their cash advances, which were not disclosed before they granted the app access to their bank accounts. Furthermore, Dave is accused of making it difficult for consumers to cancel recurring monthly charges.
The lawsuit also points out that these charges violated the Restore Online Shoppers' Confidence Act (ROSCA), which requires companies to provide a clear and simple cancellation process for subscription services. According to the DOJ, Dave's interface also misled users about the impact of tips, with many not realizing that these tips were voluntary or being misled about how they were used.
This development follows the FTC's lawsuit against Dave two months ago (in November). At that time, the FTC did not seek civil penalties in its initial complaint, naming only Dave as a defendant. After reviewing the case, the FTC referred the matter to the DOJ for further action. In December 2024, the DOJ filed an amended complaint, adding CEO Jason Wilk as a co-defendant and seeking civil penalties and consumer redress. The amended complaint emphasizes that Wilk, as the company's CEO, played a direct role in overseeing the business practices under scrutiny. The legal action now seeks unspecified monetary penalties and a permanent injunction to prevent Dave and Wilk from engaging in similar conduct in the future.
"Dave targeted consumers facing financial challenges with false promises of quick cash, while charging them unexpected fees, including so-called 'tips,'" commented Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "Today, the DOJ and FTC demonstrate their commitment to protecting consumers from these illegal practices."
In response to the lawsuit, Dave denies the allegations and states that the DOJ's claims are based on inaccurate information. The company maintains that it has always operated within the law. "We believe we have always acted within the bounds of the law, and we have relied on the fact that other government agencies have previously reviewed our business model without taking action. We take compliance and consumer transparency very seriously and intend to vigorously defend ourselves in this matter," the fintech company said in an official statement.
