Fintech company Dave (DAVE) is facing a complaint from the Department of Justice (DOJ) over alleged illegal activities on its app. These allegations include deceptive offers to draw customers in with a $500 cash advance. However, the DOJ argues that many customers were never given this advance after signing up.
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The complaint against Dave includes other alleged issues, such as the company’s tips system and hidden fees, like those added for express service. On top of that, the DOJ claims the fintech app charges customers recurring fees that aren’t easy to cancel.
Finally, the DOJ is seeking actions against Dave, including compensation for customers, monetary civil penalties, and a permanent injunction to stop the company from performing these actions in the future. It also bears mentioning that DAVE CEO Jason Wilk is included in these complaints.
Dave’s Defense Against the DOJ
The fintech company argues that the DOJ is wrong about its accusations and intends to fight the complaint. The company also notes that it has introduced a new fee structure that addresses those DOJ complaints. New customers are already under this fee structure and those that joined before Dec. 4, 2024, are being moved to it.
Investors aren’t reacting well to the DOJ complaint news or Dave’s defense against it. This has the company’s stock down 7.9% during pre-market trading today. DAVE stock has experienced a massive 1,027.21% increase year-to-date. Investors will remember it went public via a special purpose acquisition company (SPAC) merger in January 2022.
Is DAVE Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Dave is Strong Buy based on seven Buy ratings over the last three months. With that comes an average price target of $100.50, a high of $123, and a low of $58. This represents a potential 6.39% upside for DAVE shares.
