WASHINGTON, D.C. — The Federal Trade Commission (FTC) has initiated legal proceedings against Dave, an online cash advance service, for allegedly engaging in deceptive marketing practices and imposing unauthorized charges on consumers. This action targets the app’s misleading claims regarding cash advances and its controversial fee structures, which have disproportionately impacted financially vulnerable individuals.
According to the FTC’s complaint, Dave presented itself as a financial relief tool, claiming to offer cash advances of up to $500 “instantly.” However, the reality for many users starkly contradicted these promises. The FTC found that only a small fraction of consumers actually received the advertised $500 advance, with many being offered significantly lower amounts. For instance, some users reported receiving advances as low as $25, despite fulfilling their repayment obligations promptly.
In addition to misleading advance amounts, the app charged an “Express Fee” for immediate access to funds, a cost only disclosed post-registration and after consumers had granted the app access to their bank accounts. This fee varied between $3 and $25, and those who opted out faced delays of up to three business days to receive their funds.
The FTC also highlighted Dave’s practice of charging surprise “tips”—a 15% fee on advances—that were not clearly communicated to users. These so-called tips were ostensibly voluntary, yet many consumers reported feeling misled into paying them. The app’s interface even linked these tips to charitable donations, depicting a cartoon child receiving meals funded by the user’s tip. In truth, only a fraction of these tips contributed to the actual donation, with the remainder retained by Dave.
Public filings revealed that Dave amassed over $149 million from these “tips” from 2022 through mid-2024. Furthermore, the app imposed a $1 monthly membership fee, automatically debited from users’ bank accounts. This fee was not prominently disclosed, and the cancellation process was reportedly complex and opaque.
The FTC’s complaint charges that Dave’s actions violated both the FTC Act and the Restore Online Shoppers’ Confidence Act. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, emphasized the severity of these practices, noting the FTC’s commitment to protecting consumers from such deceptive and unauthorized financial schemes.
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