- Over 600 consumers file arbitration claims against Dave Inc. (DAVE, Financial) for misleading practices and hidden fees.
- FTC and DOJ allege deceptive marketing and misrepresentation of ExtraCash product by Dave.
- Legal challenges highlight regulatory scrutiny on fintech companies' practices impacting vulnerable consumers.
Over 600 consumers have initiated arbitration against Dave Inc. (DAVE), alleging the fintech company engaged in misleading practices and charged hidden fees related to its ExtraCash earned wage access product. The claims, filed through consumer protection law firm Janove PLLC, accuse Dave of falsely advertising "no hidden fees" and "instant cash advances." Instead, consumers report unexpected subscription costs, coerced "tip" payments, and withheld funds unless additional fees were paid.
The legal actions align with allegations from the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) in late 2024. The FTC filed a lawsuit in November 2024, followed by a DOJ amended complaint in December, accusing Dave of marketing the ExtraCash product with false promises concerning its availability, speed, and costs. Further claims include misrepresenting "tip" payments as charitable donations and failing to disclose a $1 monthly fee transparently.
The controversy reflects broader scrutiny of fintech companies like Dave, which market themselves as consumer-friendly alternatives to traditional banks while facing allegations of similar predatory practices. The outcome of these cases could set significant precedents for the fintech industry in its approach to marketing and serving financially vulnerable consumers.
