FTC Issues Millions in Refunds for Deceptive "Free Money" Claims

Across the Atlantic, the focus is on subscription traps and false advertising. The Federal Trade Commission (FTC) is in the process of sending over $2.6 million in refunds to consumers who were tricked by the cash advance provider FloatMe .

FloatMe was charged with luring users with promises of "free money" and instant cash advances, only to fail to deliver the promised amounts and make it nearly impossible to cancel expensive monthly subscriptions. In a separate action, the FTC is also returning more than $970,000 to victims of a deceptive payday lending scheme 

The US market is seeing a shift from pure "loan apps" to "cash advance" apps that function more like expensive subscriptions. The FTC’s action against FloatMe, which also involved discrimination against users on public assistance, sets a precedent that algorithmic promises ("Our AI will increase your limit") must be truthful .

Meanwhile, legitimate AI lenders like Upstart are trying to offer alternatives. Upstart recently announced "Cash Line," a revolving credit line offering a guaranteed $200 minimum for approved consumers with transparent APRs (5% to 36%), explicitly marketed as an alternative to "unreliable and often predatory short-term options" . This highlights the industry divide: ethical fintech versus predatory debt traps.