The Federal Trade Commission (FTC) has recently filed a complaint and a stipulated order against Bridge, It, a fintech company that operates under the brand name “Brigit”. This action pertains to the personal finance mobile application operated by the company, which has been accused of advertising cash advances to consumers using questionable tactics. In what has resulted in an $18 Million settlement, the allegations mainly revolve around the use of dark patterns and hidden fees, a subject matter that’s been gaining increasing attention in the corporate sector.
According to the FTC’s complaint, as reported by Kelley Drye & Warren LLP, Brigit was specifically targeting low-income consumers with offers for short-term cash advances of “up to $250”. These cash advances, however, were conditional upon the consumers enrolling in a $9.99 per month membership program.
The allegations get even more serious considering that only about 1% of customers reportedly received access to the promised $250 advance. This situation raises some very salient questions about the financial practices of fintech firms, especially those targeting vulnerable segments. Such practices can have substantial legal and financial ramifications for the companies involved, and also pose significant reputational risks.
This case serves as a stark reminder for legal professionals navigating the corporate world about the importance of ensuring fair and transparent business practices. In an era where customer trust can make or break a brand, using deceptive methods not only raises serious legal issues but can also lead to severe reputation damage that can be difficult to recover from. As such, it’s essential to regularly assess business practices to ensure ongoing legal compliance, as well as alignment with ethical standards.