FTC to Use PayPal to Send Refunds in FloatMe Settlement

The Federal Trade Commission (FTC) will begin sending refunded money via PayPal to consumers it said were harmed by online cash advance provider FloatMe.

Consumers who are eligible for a payment will receive an email between now and Friday (Sept. 20), the FTC plans to send PayPal payments on Sept. 23, and recipients should redeem their PayPal payment within 30 days, the FTC said in a Monday (Sept. 16) press release.

The FTC uses a variety of payment methods to send refunded money to consumers, according to a frequently asked questions (FAQ) page on its website. Consumers can visit an FTC web page to see whether the refund program in which they are involved is sending checks, debit cards, Zelle payments or PayPal payments, according to the FAQ page.

In the case of FloatMe, the refunds follow an action taken by the FTC in January, in which the regulator alleged that FloatMe promised quick and free cash advances to consumers who joined it service but then failed to deliver the promised advance amounts, charged fees to get the cash quickly, made it difficult to cancel subscriptions and discriminated against those who received public assistant, according to the release.

The FTC’s complaint also alleged that FloatMe made “baseless” claims that an algorithm or other automated system would increase the cash advance limits offered to consumers, per the release.

FloatMe did not immediately reply to PYMNTS’ request for comment.

The FTC plans to send more than $2.6 million in refunds to 449,344 consumers who were FloatMe members and paid for instant cash advances, according to the release.

When announcing the charges and the terms of a settlement order, Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a Jan. 24 press release: “FloatMe lured consumers in with false promises of free money advances, and then used dark patterns to make it difficult for consumers to cancel.”

“The FTC will continue to hold companies accountable for unfair, deceptive and discriminatory credit practices, whether they call their products loans, advances, income-share agreements or something else,” Levine said.

FTC lawsuits resulted in over $324 million in refunds to consumers in 2023.