FloatMe Fined $3 Million for Deceptive Practices

FTC orders lender to pay refunds, change business practices

An app-based lender has been charged with deceptive practices and ordered to pay $3 million in refunds to harmed consumers.

The Federal Trade Commission (FTC) has ordered FloatMe to pay refunds to consumers the regulator says were tricked into taking out loans from the company and deceived about the amount of money available to borrow.

In the settlement order, the FTC says FloatMe enticed consumers with promises of fast, free loans and then failed to deliver on advertised loan amounts. The company also charged a monthly fee for its services and made it difficult for customers to cancel.

“FloatMe lured consumers in with false promises of free money advances, and then used dark patterns to make it difficult for consumers to cancel,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to hold companies accountable for unfair, deceptive, and discriminatory credit practices, whether they call their products loans, advances, income-share agreements or something else.”

The complaint notes that while consumers were promised cash advances of up to $50 for just a $1.99 monthly fee, consumers were only able to receive $20 upon joining and had to pay an additional $4 fee to receive the money instantly (on the same day). Normal processing without the fee took up to three days.

In addition to the fine which will be used to refund consumers, the FTC order requires FloatMe to change its business practices, including making canceling a membership a straightforward process.

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