The FTC yesterday filed a complaint and stipulated order against Bridge, It (dba “Brigit”), a fintech company that operates a personal finance mobile application that advertises cash advances to consumers. According to the complaint, Brigit targeted low income consumers with offers for short-term cash advances of “up to $250” if they enrolled in a $9.99 per month membership program. The FTC alleged that only approximately 1% of customers actually received access to the $250 advance and approximately 20% were denied access to cash advances entirely.

Followers of the FTC (and this blog) will recognize common recent enforcement themes from other actions: most notably, hidden fees and dark patterns that allegedly made it difficult for consumers to cancel their subscription. A few substantive notes on the FTC’s allegations:

“Up to” claims. The complaint highlights Brigit’s claims that consumers could get “up to $250” with “no credit check” and “no interest.” The FTC did not bring allegations related to the latter two claims. As to the “up to $250” claim, the FTC has long acknowledged that “up to” claims do not require everyone to attain the represented maximum result, but cases and guidance have varied over time on what percentage is necessary to support an “up to” claim. Context is key too. Here, taking the FTC’s facts as true (which Brigit disputes in a press release responding to the complaint), 1% of customers being eligible to receive the $250 cash advance would fall well below established principles requiring, at minimum, an “appreciable number” of consumers to achieve the maximum represented benefit.
“No hidden fees.” The complaint also addresses the company’s claims that the cash advance was available without “hidden fees” and alleges this to be false and misleading because: (1) it charged consumers an additional $0.99 fee for “express delivery” of the cash advance; and (2) it required consumers to maintain their $9.99/month subscription while their cash advance was still being paid off.
Alleged dark patterns. The FTC repeated a common recent allegation against Brigit by alleging that it engaged in dark patterns by making it difficult for consumers to cancel their monthly subscription, including by: (1) refusing to honor cancellation requests made through email or chat; (2) forcing customers to navigate through a number of pages on the mobile application and then navigate back to the Brigit website to cancel; and (3) forcing customers to select a reason for cancellation prior to honoring the request; and (4) using repeated, more prominent calls to action to encourage customers to inadvertently retain their membership.

The complaint alleges separate counts for deception and unfairness, along with violations of the Restore Online Shoppers’ Confidence Act (ROSCA). As we’ve discussed in previous posts, the FTC is increasingly relying on ROSCA (along with the Gramm-Leach-Bliley Act and other avenues) as a mechanism to obtain money post-AMG Capital Management. And as we discussed here, the FTC has proposed to significantly expand its ability to obtain civil penalties and monetary relief in connection with automatic renewal and repeat delivery contracts by proposing to overhaul the Negative Option Rule. Here, the settlement requires Brigit to pay $18 million and imposes far-reaching injunctive relief that prohibits certain misrepresentations and lays out how Brigit will be required to obtain consumers’ affirmative consent to any negative option offers going forward.

FTC Alleges FinTech Provider Engaged in Dark Patterns, Concealed Fees for Cash Advances in Reaching $18 Million Settlement