On January 24, 2024, the Federal Trade Commission announced that it had reached a settlement with an online cash advance provider and its co-founders resolving claims that the company violated the FTC Act, the Restore Online Shopper’s Confidence Act (ROSCA), and the Equal Credit Opportunity Act (ECOA), by engaging in allegedly deceptive marketing tactics and discriminatory practices.
The FTC’s complaint alleges that the company charged consumers a monthly membership fee and promised consumers that they could instantly receive $50 cash advances, but only allowed consumers to receive $20 advances when they signed up, and charged extra fees for instant receipt of the cash advance. The FTC also alleges that the company made it difficult for consumers to cancel their subscriptions, resulting in the cancellation process being “manual-only, delay-filled, and error-ridden.” The FTC further alleges that the company discriminated against consumers who received public assistance like Social Security, military, and unemployment benefits, by declining advances to consumers whose income came from public assistance, despite still charging the consumers the monthly fee.
Under the settlement agreement, the company agreed to pay $3 million in consumer refunds. The company also agreed to various injunctive relief including providing an easier method for cancellation and enacting a fair lending program
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