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The US Department of Justice (DOJ) and Federal Trade Commission (FTC) have launched a civil enforcement action against Dave Inc. and its CEO, Jason Wilk, accusing the company of non-compliance with federal financial services laws.
The lawsuit, filed in the US District Court for the Central District of California, alleges deceptive practices in violation of federal law, including the Federal Trade Commission (FTC) Act and the Restore Online Shoppers’ Confidence Act (ROSCA).
Financial technology company Dave, which is known for its mobile app offering short-term cash advances and got early backing from celebrity entrepreneur Mark Cuban, has been accused of deceiving consumers about the terms and fees associated with its services.
The complaint alleges that the firm, which went public on Nasdaq in 2022 through a special purpose acquisition company (SPAC), often misrepresents its offerings, such as advertising cash advances of "up to $500" with no hidden fees, a claim the DOJ asserts is rarely true.
“The Justice Department is committed to stopping companies and their executives from preying on financially vulnerable consumers with deceptive advertisements, hidden fees and subscriptions that are difficult to cancel,” said Brian M. Boynton, head of the Justice Department’s civil division.
“We will continue to enforce the FTC Act, ROSCA and other statutes that protect consumers from such misconduct.”
Key accusations
The lawsuit states that Dave charges an undisclosed “express fee” for instant cash advances and uses a misleading interface to induce users to leave tips.
Despite marketing claims that the tips have a social element, and would help provide meals for needy children, the complaint alleges that only a nominal amount is donated, insufficient to fulfil the promised impact. Most of the tips, the DOJ claims, are retained by Dave.
The complaint also accuses the company of violating ROSCA by enrolling customers in recurring monthly membership fees without clearly disclosing the terms or offering a simple cancellation method.
The DOJ argues that these actions have resulted in millions of dollars in unauthorised charges to consumers.
The amended filing marks a significant escalation, as it names Wilk as a co-defendant.
The FTC previously brought a case against Dave alone in November 2024, but the DOJ’s amended complaint goes further in seeking civil penalties against both the company and Wilk, along with restitution for affected consumers and a permanent injunction against the alleged deceptive practices.
The FTC referred the case to the DOJ following a 4-1 vote, with commissioner Melissa Holyoak dissenting.
The commission accuses Dave and Wilk of charging consumers “hundreds of millions” in surprise fees disguised as tips.
The DOJ has pledged to pursue monetary civil penalties and consumer redress vigorously.
“Dave has targeted consumers facing financial challenges with false promises of quick cash while pocketing surprise fees, including by paying itself a so-called ‘tip’,” said Samuel Levine, director of the FTC’s bureau of consumer protection.
“Today the DOJ and FTC have shown their commitment to work together to protect consumers from these unlawful practices.”
Vixio approached Dave for comment but had not received a response at the time of publishing.
