On November 18, 2020, the Federal Trade Commission (FTC) announced that it had filed a complaint against a California-based mobile banking app and its founder and CEO for allegedly falsely misrepresenting to users that they would receive high interests rates on their banking accounts and that they would have constant access to their funds.
According to the complaint, the company allegedly induced consumers to deposit their funds into the banking app by promising that users would receive substantial interest rates on their deposits of at least 0.2% or 1.0%, when users actually received a base interest rate of 0.04% or, in some cases, no interest at all.
Furthermore, the FTC alleged that the company misrepresented to users that they would have “24/7” access to their funds and receive their withdrawn funds within five or fewer business days. Instead, according to the FTC, some users only gained access to their funds after several weeks or months of repeated complaints to the defendants while other users never received access to their funds at all.
The FTC claims that the alleged conduct violated the FTC Act by making false or misleading promises to users on the functionality of the banking app. Accordingly, the FTC seeks to obtain injunctive relief, restitution, and the refund of monies paid.
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