WASHINGTON—The Federal Trade Commission has reached a settlement with online cash advance provider FloatMe and its co-founders, after having accused it of using “empty promises” of quick and free cash advances to entice consumers to join its service and then failing to deliver the promised advance amounts, making it difficult to cancel, and discriminating against consumers who receive public assistance.
FloatMe was also charged with making baseless claims that cash advance limits would be increased by an algorithm or another automated system, the FTC added.
Under the terms of a settlement order, FloatMe, as well as its co-founders Joshua Sanchez and Ryan Cleary, are required to:
- Provide $3 million to be used to refund customers
- Stop the company’s deceptive marketing
- Make it easier for consumers to cancel their subscriptions
- Institute a fair lending program
About the Scheme
In its complaint against FloatMe, the FTC says that the company charged consumers $1.99 per month to join the app, and promised that consumers could access up to $50 in cash advances instantly as part of their membership.
The FTC said, however, that consumers were only able to access $20 in advances when they signed up and were charged a $4 fee if they wanted to get cash “instantly.” Otherwise, they had to wait up to three days for the promised funds.
“This stood in contrast to FloatMe’s ads that said consumers could get ‘emergency funds’ for free ‘within minutes,’” the FTC said.
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