The Federal Trade Commission (FTC) has filed a complaint against the online cash advance app Dave, alleging the company used misleading marketing tactics that deceived consumers about its cash advance offerings. The complaint, filed in the U.S. District Court for the Central District of California, accuses Dave of misrepresenting the maximum advance amount available, charging undisclosed fees, and implementing unauthorized “tips” without consumer consent.
The FTC’s investigation alleges that Dave targets financially vulnerable consumers, describing them as “financially coping” or those struggling to make ends meet. According to the complaint, Dave’s marketing claims that users could receive up to $500 “instantly” through the app. However, the FTC’s complaint states that this maximum amount was only accessible to a small fraction of users, with most consumers qualifying for substantially lower advances. A consumer cited in the complaint shared their disappointment with the service, stating, “Claims you can borrow up to 500.00 dollars. But, I only was able to get 25.00. Not very helpful.”
FTC Bureau of Consumer Protection Director Samuel Levine commented on the allegations, saying, “Dave lured in consumers living paycheck-to-paycheck with false claims of big-dollar advances, then reached into their pockets to give itself a so-called ‘tip.’ Whether the products are called cash advances, payday loans, or something else, the FTC will take action to protect consumers from unauthorized charges and deceptive claims.”
The complaint also details how Dave’s “Express Fee” for instant advances is not disclosed until users complete the sign-up process and link their bank accounts. This fee, which ranges from $3 to $25, is required for immediate access to funds. Consumers who do not pay the express fee must wait two to three business days to receive their advance.
Beyond the express fee, the complaint accuses Dave of imposing an additional charge described as a “tip.” According to the FTC, Dave collects tips at 15% of the advance amount and often does so without the consumer’s clear consent. The complaint includes feedback from a user who expressed feeling misled by the setup: “The interface is set up to trick you into giving the tip… I feel cheated/scammed by this whole process.”
Dave also incorporates imagery in its interface that appears to encourage tipping for charitable purposes. Consumers are shown a cartoon of a child surrounded by food and tip options labeled as “10 Healthy Meals,” “15 Healthy Meals,” and “20 Healthy Meals,” suggesting that their tips would help fund meals for those in need. However, according to the complaint, Dave contributes only 10 cents for each percentage of the tip, with the majority of the funds remaining with the company. When consumers attempt to lower the tip, they see the cartoon image of a child’s food being taken away until an empty plate appears, reinforcing the perception of a direct impact on a charitable cause.
In addition to these fees, the FTC’s complaint alleges that Dave has been charging a $1 monthly “membership fee” to users, automatically debited from consumers’ bank accounts. This fee is not disclosed prominently, and consumers have reported difficulty in canceling it. One consumer described their frustration in trying to cancel the membership: “I’ve tried leaving, but they literally will not let me go. I had to fight with them to delete my account, and I kept getting charged the membership fee… LEAVE ME ALONE. I HATE DAVE.”
The complaint alleges that Dave’s conduct violates the FTC Act, which prohibits unfair or deceptive practices, and the Restore Online Shoppers’ Confidence Act, designed to protect consumers from hidden fees. The FTC vote to proceed with the complaint was approved 4-1, with Commissioner Melissa Holyoak opposing the action.
Dave’s response to these allegations has not been made public, and the case remains pending as it awaits a decision in court. Daniel Hanks and Jason Sanders, attorneys with the FTC’s Bureau of Consumer Protection, are leading the case.
The FTC’s decision to file a complaint indicates that it has “reason to believe” Dave has engaged in practices that could harm the public interest. However, the FTC’s filing is not a judgment, and the case outcome will ultimately be decided by the court.