Adobe Stock UPDATE: This article includes comments from Dave about the Justice Department’s complaint as well as information from the fintech’s third-quarter earnings call.The cash-advance app maker Dave is blasting the Department of Justice for bringing a lawsuit against the company and its founder, though the fintech also says that it would soon complete its shift away from the business model at the crux of the dispute.Dave said Tuesday in a written statement that the DOJ’s lawsuit is based on “various inaccuracies” and is a “continued example of government overreach.” The Los Angeles-based company also said it would update its fee structure to eliminate optional tips and express fees for its cash advance product, “since optional tips seemed to be a primary focal point of the complaint.”The company had announced on its third-quarter earnings call that it would test the new business model, but it said this week that “based on strong initial results,” it would complete “full implementation” in early 2025.The DOJ’s lawsuit, which replaces a complaint filed by the Federal Trade Commission in November, lists Dave and CEO Jason Wilk as co-defendants. The government is seeking consumer redress, civil penalties and a permanent injunction “to prevent future violations.” The FTC’s original case against the Los Angeles-based fintech didn’t name Wilk or demand penalties.Earlier this week, the FTC said that it refers a complaint to the DOJ for civil penalties “when it has ‘reason to believe’ that the named defendants are violating or are about to violate the law.” The day after the DOJ filed suit, Dave said that the allegations are largely unchanged from the FTC’s November complaint, and that the DOJ’s additions to demand civil money penalties and name Wilk as a co-defendant are “without any support … [or] basis.””We believe that we 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,” the company said in its press release. “We take compliance and consumer transparency very seriously, and we intend to vigorously defend ourselves in this matter.”The fintech added that the DOJ must prove that there was knowledge of the alleged violation to obtain civil monetary penalties.Dave’s stock has fallen some 11% since the DOJ announced the enforcement action and was trading at $84.09 mid-morning Thursday.Still, the fintech was one of the best market performers of 2024, notching a more than 900% rise from January to December. Dave said Tuesday that “the company’s outlook remains positive,” and that the firm will share a more “substantive update” during its fourth-quarter earnings call in March.When the FTC sued Dave on Nov. 5, the company accused the agency of regulatory overreach and vowed to fight its charges.”Following months of good faith negotiations, we are disappointed the FTC has chosen to file suit against Dave, a company on a
Ven. Gen 10th, 2025
