The Federal Trade Commission (FTC) has set its sights on Dave, an online cash app and neobank, accusing the company of deceptive marketing practices that misled consumers. The core of the issue lies in how Dave marketed $500 cash advances and how it handled the associated fees, including an “Express Fee” for immediate fund access.
According to the FTC, Dave’s promotional language gave the impression that cash advances were “instant,” using phrases like “on the spot,” yet failed to adequately disclose that these immediate transfers came with fees. It was only after consumers had completed the sign-up process and granted Dave access to their bank accounts that they were informed of the costs, which could range from $3 to $25. If users preferred not to pay this fee, they were left waiting two to three business days for the funds.
Adding to the controversy, the FTC highlighted what it called a surprise “tip” fee, which the app’s interface allegedly made hard to detect or avoid. This practice fits the pattern of “dark patterns”—design tactics that subtly trick users into actions that benefit the company rather than the consumer. Such tactics include pre-checked boxes during sign-ups or prominently displaying actions the company wants customers to take.
The FTC’s concern extends beyond these fees to Dave’s use of emotionally charged imagery and messaging. Consumers were shown images of a cartoon child with food under phrases like “10 Healthy Meals,” suggesting that their tips would provide meals for those in need. In reality, only 10 cents of each tip is donated, far from providing even one meal. If users tried reducing their tips, they were shown images of food being stripped from the child’s plate.
Financial figures highlight the impact of this practice: from 2022 through mid-2024, Dave reportedly earned over $149 million from these tips. Moreover, Dave enforces a $1 monthly membership fee deducted straight from customers’ bank accounts. The FTC claims that canceling this fee was overly complicated, and some customers were even charged after attempting to delete their accounts.
The complaint filed by the FTC includes screenshots that it argues illustrate violations of Section 5(a) of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). The FTC is calling for measures to halt Dave’s practices and could pursue monetary penalties or other court-directed relief.
Dave responded to the FTC’s allegations with disappointment, arguing that the claims about their fee disclosures and consent processes are inaccurate. “Dave’s ability to charge subscription fees and optional tips and express fees is not in question,” the company stated, describing the case as an example of “regulatory overreach” and emphasizing its commitment to compliance and customer transparency. Despite the lawsuit, Dave maintains that it has acted within the law and is focused on serving its members.
The outcome of this case could not only shape Dave’s future activities but also provide a broader lesson on corporate transparency and consumer protection. It serves as a reminder for businesses to maintain ethical marketing practices while balancing profitability with consumer trust.
