A financial technology company and its CEO are in hot water with the law after allegedly engaging in deceptive practices in California. Dave Inc. and Jason Wilk, the company’s co-founder, President, Chief Executive Officer and Chairman of the Board of Directors, have been accused of misrepresenting the terms of their cash advance service to consumers.
According to a complaint filed in the U.S. District Court for the Central District of California, Dave and Wilk market their app as instantly providing consumers "up to $500" without any hidden fees. However, the complaint alleges that the defendants actually very rarely offer consumers anywhere near the advertised $500, often do not offer any cash advance at all, and charge an "express fee" to get cash advances instantly that they do not clearly disclose before consumers give the app access to their bank accounts.
The lawsuit also alleges that the defendants induce app users to pay a sizeable "tip" on Dave’s cash advances by using a deceptive interface that does not offer a clear way to avoid tipping. According to the complaint, Dave’s app falsely represents to consumers that the company will purchase or pay for a certain number of meals for needy children based on the size of a customer’s tip, while in reality Dave keeps the vast majority of tips for itself and donates only a nominal sum to charity that is insufficient to purchase the stated number of meals.
Furthermore, the complaint alleges that the defendants have violated the Restore Online Shoppers’ Confidence Act (ROSCA) by enrolling their customers in automatically recurring monthly membership fees without clearly and conspicuously disclosing material transaction terms and without providing a simple mechanism for consumers to cancel those recurring fees.
The complaint, filed by the Justice Department, seeks unspecified amounts of consumer redress and monetary civil penalties from the defendants and a permanent injunction to prohibit them from engaging in future violations. The government’s lawsuit aims to put an end to what it calls "companies and their executives from preying on financially vulnerable consumers with deceptive advertisements, hidden fees and subscriptions that are difficult to cancel."
Defendant: Dave Inc. and Jason Wilk
Criminal Charges: Violations of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA)
City and State: Los Angeles, California
Exact Date: April 30, 2024
Sentence or Outcome: Ongoing litigation
Dollar Amounts: None specified
Related Federal Cases
Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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