Cleo AI Settles $17 Million FTC ‘Fast Money’ Case
The FTC has won a $17 million settlement against online cash advance company Cleo AI.
The settlement stems from a complaint by the Federal Trade Commission (FTC) that Cleo had deceived consumers about the amount of money they could get and how quickly they could get it, according to a Thursday (March 27) news release.
“The Complaint lays out how Cleo misled consumers with promises of fast money, 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,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in the release.
According to the FTC, Cleo’s advertising promised consumers access to cash advances worth hundreds of dollars, but few customers ever got that amount. And while the ads also promised same-day or instant advances, this service came with a fee, one that still didn’t provide users with quick access to cash, the commission alleged.
Consumers also told the FTC they were charged monthly fees despite repeated requests to cancel, with Cleo telling them they couldn’t cancel their subscription until outstanding cash advances were paid.
In a statement provided to PYMNTS, Cleo said the FTC’s allegations were false.
Cleo maintains that it is clear in its ads that the amount of cash is dependent on customer eligibility and that it specifies that advances are on a spectrum of amounts. The company said it also makes it clear to customers that they offer faster disbursements to customers willing to pay for that service. Cleo also disputes the FTC’s claim that customers could not cancel subscriptions without paying their advances.
“Though we strongly deny any wrongdoing and are confident that we would have prevailed in court, putting this matter behind us was the best move to keep our focus where it belongs—improving the financial lives of millions of Americans,” said Colin Jones, Cleo’s general counsel.
The settlement comes as cash-strapped American consumers continue to seek alternative sources of credit to cover their bills, as PYMNTS Intelligence research has found.
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