The Federal Trade Commission (FTC) launched legal action Tuesday against neobank Dave for alleged deceptive marketing practices regarding its $500 cash advance service and hidden fee structure.
The FTC alleges Dave misled consumers by advertising “instant” and “on the spot” cash advances without disclosing Express Fees ranging from $3 to $25. Users who declined the fee faced 2-3 business day waiting periods. The complaint also targets Dave’s “tip” system, which used manipulative design patterns showing a cartoon child with meals to encourage larger tips, while only donating 10 cents per tip to charity.
According to FTC filings, Dave collected over $149 million in tip revenue between 2022 and mid-2024. The company also allegedly made it difficult for users to cancel its $1 monthly membership fee, continuing to charge some customers even after account deletion attempts.
Dave responded by expressing disappointment with the FTC’s action, defending its fee disclosure practices and vowing to “vigorously defend” itself against what it calls “regulatory overreach.”
