FTC Orders FloatMe to Pay $3 Million for 'Free Money' Lies and Discrimination

FloatMe is a cash advance provider that promised users "free money" and quick cash advances. The company marketed itself as a helping hand for people living paycheck to paycheck .

The Allegations

The Federal Trade Commission (FTC) charged FloatMe and its co-founders with multiple violations :

Empty Promises of "Free Money"

FloatMe lured consumers with promises of quick and free cash advances. But once users signed up, the company failed to deliver the promised advance amounts.

Impossible Cancellation

The company made it difficult to cancel subscriptions, trapping users in recurring fees.

Discrimination Against Public Assistance Recipients

FloatMe allegedly discriminated against consumers who receive public assistance – a violation of fair lending laws.

Baseless Algorithm Claims

The company claimed that cash advance limits would be increased by an algorithm or automated system. The FTC said these claims were baseless – there was no functioning algorithm doing what they promised.

The Settlement

Under the terms of a settlement order, FloatMe and its co-founders Joshua Sanchez and Ryan Cleary are required to :

• Provide $3 million to be used to refund customers
• Stop deceptive marketing
• Make it easier for consumers to cancel subscriptions
• Institute a fair lending program

The FTC has already begun sending more than $2.6 million in refunds to harmed consumers .

What This Means for You

FloatMe's case shows a clear pattern: "free money" promises are almost always lies. If an app promises cash advances with no cost, ask yourself how they make money. The answer is usually hidden fees, subscriptions you cannot cancel, or your personal data. And if an app claims an algorithm will increase your limit over time, be skeptical – it may be a lie.