On January 2, the Federal Trade Commission (FTC) filed a complaint against FloatMe Corp. (“FloatMe”), a fintech that offers short-term cash advances through its mobile app, alleging violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), and the Equal Credit Opportunity Act (ECOA). The complaint is similar in its language and allegations to one filed by the FTC against Bridge It, Inc., a personal finance app provider, in November of 2023 relating to subscription practices and hidden fees that ultimately resulted in an $18 million settlement. The more recent complaint against FloatMe also includes allegations of ECOA violations and names two of FloatMe’s officers as individual defendants.

The FTC’s complaint alleges that FloatMe misrepresented that larger cash advances would be available to consumers who enrolled in a subscription-based membership, hid fees that had to be paid in order to receive “instant” advances, charged consumers for services without consent, and made it unnecessarily difficult for consumers to cancel their memberships. While consumers were able to easily enroll in the subscription plan, they had to email a customer support agent to cancel. The complaint claims that FloatMe only had two employees actively handling customer support despite nearly 40,000 customers on the platform.

Finally, the complaint alleges that FloatMe violated ECOA by ignoring income derived from any public assistance program when evaluating consumers for eligibility to receive a cash advance. Under ECOA, creditors are prohibited from discriminating against applicants whose income is wholly or in part derived from any public assistance program. This action is another example of regulators focusing on subscription practices and hidden fees, and could be the beginning of a trend of regulators focusing on discrimination on the basis of receipt of public assistance, which the CFPB also flagged as an area of concern in its Summer 2023 Supervisory Highlights.