WASHINGTON, D.C. — Online cash advance company Cleo AI has agreed to pay $17 million to settle allegations brought by the Federal Trade Commission (FTC) that it misled consumers about the terms, availability, and speed of its cash advance services. The complaint, filed in the U.S. District Court for the Southern District of New York, also accused Cleo of making it unnecessarily difficult for customers to cancel their subscription services.
The FTC’s complaint detailed a pattern of deceptive advertising, alleging that Cleo consistently overstated the amount of money consumers could access while underplaying associated costs and subscription hurdles. Consumers were reportedly lured with promises of instant access to hundreds of dollars, yet in practice, most received far less and often had to pay for expedited delivery, which still did not always deliver money immediately.
“The Complaint lays out how Cleo misled consumers with promises of fast money, but consumers found they received much less than the advertised hundreds of dollars promised, had to pay more for same-day delivery, and then had difficulty canceling,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection.
Allegations of Deceptive Practices
According to the complaint, Cleo’s marketing materials promised customers access to large sums of money quickly, proclaiming ease and efficiency. However, the FTC alleges this was far from reality for most users. Few, if any, received the promised “hundreds” in cash advances, and those requiring same-day funds often faced additional fees of which they were not adequately informed. Even after paying for faster service, consumers still had to wait up to 24 hours in some instances.
Complaints from Cleo’s users highlighted the gap between the company’s promises and its services. One customer shared, “There’s no other way for me to say it. I need my money right now to pay my rent. I have no other option, I can’t wait 3 days. I can’t wait 1 day. I need it now. I would never have used Cleo if I would have thought I would ever be in this situation.”
Another frustrated consumer added, “I just subscribed and paid for IMMEDIATE 35 dollars. Now I go on here and it says up to 24 hrs. I have my son today and he needs food and I need gas to go get it. I can’t wait 24 hours, or I wouldn’t have bothered.”
Beyond these issues, the FTC also cited Cleo for obstructive cancellation practices. Customers who attempted to end their subscriptions often found themselves charged for additional months, with the company claiming cancellation could not occur until all cash advance balances were paid in full.
Terms of the Settlement
Under the terms of the settlement order, Cleo is required to pay $17 million, which will be used to refund affected consumers. The company is also prohibited from misrepresenting any material aspects of its cash advances, including the advertised amounts available, associated costs, and delivery times.
To address the concerns surrounding subscriptions, Cleo must now clearly disclose all subscription terms, secure consumers’ informed consent before charging them, and offer an easy, straightforward cancellation process.
“This settlement ensures that consumers will no longer be misled or subjected to hidden hurdles when using Cleo’s services,” said the FTC in a statement.
Next Steps
The FTC’s Commission vote to approve the complaint and settlement order was unanimous at 2-0. The staff attorneys responsible for the case, Adam Saltzman and Sally Tieu from the FTC’s Bureau of Consumer Protection, emphasized that the resolution is aimed at restoring trust and fairness for the consumers Cleo misled.
The settlement is part of the FTC’s broader effort to protect consumers from deceptive financial and subscription practices, particularly in industries targeting financially vulnerable individuals. By holding Cleo accountable, the Commission reinforces its commitment to safeguard consumers’ rights and the principles of transparency and choice in financial services.
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