The Department of Justice (DOJ), on behalf of the Federal Trade Commission (FTC), filed an amended complaint in its lawsuit against Dave Inc. (Nasdaq: DAVE) on December 30, 2024.
According to an update from Fintech firm Dave, this is “not a new lawsuit, and it is typical for the DOJ to take over litigation of this type.”
As noted by Dave, the company claims that these particular allegations in the lawsuit have “not changed in substance.”
Dave’s management said they believe that the amendment simply adds a claim for civil money penalties (CMPs) without “any support and adds Jason Wilk, Founder and CEO of Dave, as a defendant without any basis.”
Dave also believes the amended complaint is “a continued example of government overreach and includes numerous allegations that are based on various inaccuracies.”
According to a blog post by Dave, the DOJ must prove that there was knowledge of the “alleged violation of the law to obtain CMPs.”
The Fintech firm added that they believe that they have “always acted within the law, and we have continued to rely on the fact that other government agencies have previously reviewed the company’s business model without taking action.”
They claim to take compliance and consumer transparency “very seriously, and they intend to vigorously defend ourselves in this matter.”
Furthermore, since optional tips seemed to be a primary focal point of the complaint, they are “providing an update on our simplified mandatory fee structure.”
The new fee structure reportedly “eliminates optional tips and express fees for the Company’s ExtraCash product.”
As discussed on Dave’s third quarter 2024 earnings call, this new fee structure was the next step in the “evolution of the Company’s business model that was taken in the ordinary course.”
Following positive customer feedback and adoption, all new Dave members onboarded on or after December 4, 2024 have been “transitioned to this new fee structure and the transition of existing members is underway.”
Based on strong initial results, which suggest enhancements to member lifetime value, the company expects to “complete the full implementation of its new fee structure in early 2025.”
Overall, the company’s outlook remains positive, and they “look forward to sharing our results and a more substantive update during our fourth quarter earnings call in early March.”
As covered, Dave is a U.S. neobank and fintech pioneer serving millions of everyday Americans.
Dave claims that it uses “disruptive” technologies to provide best-in-class banking services at a fraction of the price of incumbents.
Dave partners with Evolve Bank & Trust, a FDIC member.