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"Justice Department Takes on Cash-Advance Controversy: The Case of Dave App Raises Questions on Consumer Protection and Financial Ethics"🚨

The DOJ and FTC have accused Dave, a personal finance app, of false advertising for promising $500 cash advances. According to the complaint, most new users received no money, and only a tiny fraction got the full $500. Instead, typical advances were around $25, with additional charges like an "express fee" for instant access and a default 15% "tip." Dave also enrolled users in recurring monthly subscriptions. Dave refutes these allegations, calling the lawsuit an example of government overreach with inaccurate claims.

The allegations against Dave by the DOJ and FTC include:

- False Advertising: Dave advertised cash advances up to $500, but the reality was different. The complaint states that three-quarters of new users received no advance, and less than one in 45,000 got the full $500.

- Targeting Financially Vulnerable: The app supposedly targeted those in financial distress, misleading them about the availability of funds.

- Hidden Fees:

- Express Fee: Users had to pay up to $25 for instant access to even small amounts like $25.

- Tips: A 15% default "tip" was automatically applied to advances, which users might not have consented to, and it was suggested this was not clearly explained.

- Monthly Subscription: Users were automatically enrolled in a monthly subscription fee without clear consent or an easy way to cancel.

Dave has countered these accusations by denying the claims, arguing that the lawsuit reflects government overreach and is based on inaccuracies. They maintain their business practices are legal and transparent.