Feds say the firm made misleading cash advance promises
of ConsumerAffairsCleo AI, an online cash advance company, has agreed to pay$17 millionto settle allegations by theFederal Trade Commission (FTC)that itmisled consumersabout how much money they could receive and how quickly they would get it.
The settlement also addresses complaints that Cleo made itdifficult for users to cancel subscriptions, continuing to charge them against their wishes.
In a complaint filed in federal court alongside the proposed settlement, the FTC accused Cleo offalse advertising and deceptive business practices, particularly targeting low-income consumers in urgent financial need.
Promises vs. reality
Cleo misled consumers with promises of fast money, saidChristopher Mufarrige, Director of the FTCs Bureau of Consumer Protection. But consumers found they received much less than the advertised hundreds of dollars promised, had to pay more for same-day delivery, and then had difficulty canceling.
According to the FTC:
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Cleos ads claimed users could accesshundreds of dollarsin instant advances, butalmost no one received the full advertised amounts.
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Consumers were promisedsame-day or instant cash, but those speeds requiredan extra fee, and many stillwaited until the next dayfor their funds.
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Cleo allegedlymade it hard to cancel subscriptions, continuing to charge users even after multiple requests to stop service. In some cases, the company told users they could not cancel until their outstanding advance was repaid.
One user, cited in the complaint, said, I need my money right now to pay my rent I would never have used Cleo if I thought I would be in this situation. Another reported paying for an immediate $35 advance only to be told the funds could take up to 24 hours.
Settlement terms
Under the proposed settlement:
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Cleo muststop misrepresentinghow much money consumers can access and how fast theyll receive it.
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The company mustclearly disclose fees and subscription terms, obtain usersinformed consentbefore charging them, and provide asimple cancellation method.
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The$17 million settlementwill be used to providerefunds to harmed consumers.
This case marks another warning to fintech firms that federal regulators are closely watching marketing practices in therapidly growing digital lending space, the FTC cautioned.
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Posted: 2025-03-28 19:34:13
