Online Bank Dave Updates Fee Structure After FTC Complaint Goes to Federal Court [Video]

Shares of Dave Inc. (DAVE) sank 9% Tuesday as the online bank reacted to a move by the Federal Trade Commission (FTC) to refer its complaint against the company to the Department of Justice (DOJ), which in turn filed a lawsuit in a California federal court.

In the initial charge, the FTC said Dave uses “misleading marketing to deceive consumers about the amount of its cash advances, charges consumers undisclosed fees, and charges so-called ‘tips’ to consumers without their consent.”

The amended complaint from the DOJ names co-founder and CEO Jason Wilk as a co-defendant. It said Dave and Wilk marketed the company’s app “as instantly providing consumers ‘up to $500’ without any hidden fees,” when in fact few got anywhere near that amount, if they received money at all. Officials added that customers were hit with an “express fee” in order to get immediate cash advances “that they do not clearly disclose before consumers give the app …