The US Department of Justice and Federal Trade Commission have initiated legal action against Dave, the mobile banking app, alleging that it misled customers regarding its charges.
The lawsuit, which also names Dave CEO Jason Wilk, claims that the company violated US law through deceptive advertising practices related to cash advances promoted on the platform. It further alleges that Dave engaged in hidden fees, misused customer tips, and had inadequate cancellation processes for recurring charges.
A previous legal action was filed in November but did not seek penalties or name Wilk as a defendant. This latest filing, however, calls for monetary penalties, consumer redress, and measures to prevent future violations.
Brian M. Boynton, principal deputy assistant attorney general, stated, “The Justice Department is committed to stopping customers and their executives from preying on financially vulnerable consumers with deceptive advertisements, hidden fees, and subscriptions that are difficult to cancel.”
In response to the lawsuit, Dave accused the DOJ and FTC of “government overreach” and asserted that the lawsuit is based on “various inaccuracies.” The statement issued on December 31 stated, “We believe that we have always acted within the law, and we have continued to rely on the fact that other government agencies have previously reviewed the Company’s business model without taking action. We take compliance and consumer transparency very seriously, and we intend to vigorously defend ourselves in this matter.”
Additionally, Dave announced that it introduced a new fee structure on December 4 and is currently transitioning existing customers to the new model.