The US Department of Justice (DoJ) and the FTC have taken legal action against Dave, a UK-based mobile banking app.
According to Finextra, the lawsuit accuses Dave and its CEO, Jason Wilk, of deceptive advertising practices particularly related to cash advances promoted on the platform. This legal scrutiny highlights potential misconduct involving hidden fees, misuse of customer tips, and challenges in cancelling recurring charges.
Originally filed in November without seeking penalties or naming Wilk, the updated lawsuit now demands monetary penalties, consumer redress, and preventative measures against future violations. The principal deputy assistant attorney general, Brian M. Boynton, emphasized the government’s dedication to protecting consumers from financial exploitation through misleading advertisements and difficult-to-cancel subscriptions.
In response, Dave has strongly refuted the allegations, terming the lawsuit as an instance of “government overreach” and pointing out that other government bodies have previously reviewed and not acted against the company’s business model. The statement released on December 31 defends the company’s legal compliance and consumer transparency, asserting their intention to “vigorously defend” themselves. Furthermore, Dave announced that as of December 4, it has been implementing a new fee structure and is currently transitioning existing customers to this model.
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