Banking app Dave, which the Federal Trade Commission alleged didn't provide promised cash advances and made millions from donations, is now facing a lawsuit from the Department of Justice.
The amended lawsuit filed Monday against Dave by the Justice Department takes the place of the original lawsuit filed by the FTC in November, and seeks seeks unspecified amounts of money to compensate wronged customers and names Dave Chief Executive Jason Wilk as a defendant.
The lawsuit alleges that Dave, a publicly-traded company describing itself as a "neobank," advertised "instant ... up to $500" cash advances, but only offered the full amount a tiny percentage of the time and most customers got much smaller amounts like $25.
Dave also charged consumers hundreds of millions of dollars in surprise "tips," which asked for 15% tips alongside an image of a child with food and the text "Feeding America," suggesting the money was going to charity, but the company only donated 10 cents for each "tip," the lawsuit alleges.
Dave didn't immediately respond to ConsumerAffair's request for comment.
In November, a spokesperson for Dave told ConsumerAffairs the company has been cooperating with the FTC for months and that the agency's action is an overreach.
"The FTC asserts many incorrect claims regarding Dave’s disclosures and how the Company acquires consent for the fees associated with our products," the Dave spokesperson said. "Dave’s ability to charge subscription fees and optional tips and express fees is not in question."
In July, the company responded to the Consumer Financial Protection Bureau's tightening of regulations around payday loans.
"We are closely monitoring the recently proposed interpretive ruling from the CFPB around paycheck advance and earned wage access (“EWA”), a model which Dave was originally founded on, but transitioned away from beginning in 2022 due to a lack of certainty around the regulations," Dave Chief Executive Jason Wilk said in a statement.