The U.S. Justice Department has filed a civil enforcement action against fintech company Dave (DAVE.O) and its CEO Jason Wilk, alleging violations of federal law. The case, supported by the Federal Trade Commission (FTC), accuses the company of deceptive practices tied to its personal finance app.

According to the complaint, Dave attracted users with promises of cash advances up to $500, which many customers reportedly did not receive. The government also claims the company misled consumers by charging hidden fees, misrepresenting how customer tips were used, and imposing recurring monthly fees without an easy cancellation process.

The Justice Department is seeking monetary civil penalties, consumer redress, and a permanent injunction to prevent future violations. The complaint filed on Monday replaces an earlier one filed by the FTC in November, which had only targeted Dave and did not seek civil penalties.

Dave has denied the allegations, stating that many claims are inaccurate. The company highlighted its recent changes, including a streamlined fee structure eliminating tips and “express fees” that were criticized by regulators. New customers onboarded after December 4 have been transitioned to the revised fee system, and existing customers are gradually being shifted as well.

Dave has pledged to defend itself against the allegations and emphasized its commitment to providing transparency and fairness to its users. WASHINGTON, Dec 31 (Reuters)