The Federal Trade Commission (FTC) has referred its previously announced federal court case against online cash advance firm Dave to the Department of Justice (DOJ).
The DOJ, in turn, has filed an amended complaint that names the company’s CEO, Jason Wilk, as a defendant and seeks civil penalties, the FTC said in a Monday (Dec. 30) press release.
The complaint filed by the DOJ amends and replaces the one filed by the FTC in November, which named only the company as a defendant and did not seek civil penalties, the DOJ said in a Monday press release.
The DOJ’s civil enforcement action against Wilk and Dave alleges that they violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) by deceptively advertising Dave’s cash advances, charging hidden fees, misrepresenting how the company uses the “tips” paid by customers, and charging recurring monthly fees without providing a simple way to cancel them, according to the release.
Dave did not immediately reply to PYMNTS’ request for comment.
The DOJ said in its press release that the civil action is part of its efforts to enforce statutes that protect consumers from companies’ misconduct.
“The Justice Department is committed to stopping customers and their executives from preying on financially vulnerable consumers with deceptive advertisements, hidden fees and subscriptions that are difficult to cancel,” Principal Deputy Assistant Attorney General Brian M. Boynton said in the release.
The DOJ’s complaint seeks unspecified amounts of consumer redress and monetary civil penalties as well as a permanent injunction to prohibit the defendants from engaging in future violations, per the release.
The FTC announced its lawsuit against Dave in a Nov. 5 press release.
Reached by PYMNTS at the time, Dave pointed to a Nov. 5 statement in which the company said: “It is worth emphasizing that the FTC’s action, for which we believe we have strong defenses, is related to consumer disclosures and consent, not our ability to charge subscription fees and optional tips and express fees moving forward. Accordingly, we have not contemplated any changes to our forecast as a result of the FTC’s action.”
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