The Chime Settlement Agreement: What You Need to Know
Chime, the popular mobile banking app, has reached a settlement agreement with the Federal Trade Commission (FTC) over allegations of deceptive marketing practices. The settlement, which was announced on February 19, 2021, requires Chime to pay $1.5 million in redress to affected consumers and to change its advertising practices.
The FTC alleged that Chime misled consumers by advertising “Get Paid Up To 2 Days Early” without adequately disclosing the circumstances under which that benefit would be available. Specifically, Chime failed to disclose that the benefit was contingent on the timing and processing of the payer`s funding and that Chime had no control over when funds would be available.
The settlement agreement requires Chime to clearly disclose the terms and conditions of its deposit products and to clearly disclose any restrictions or limitations on those products. Chime must also provide consumers with a means to cancel their account and receive a refund if they are dissatisfied with the service.
For consumers who were misled by Chime`s advertising, the settlement provides for redress payments of up to $30 each. Consumers who were charged overdraft fees as a result of Chime`s deceptive advertising may be eligible for additional redress.
The Chime settlement agreement is a reminder that companies must be transparent in their marketing practices and ensure that their advertising accurately reflects the terms and conditions of their products and services. It also highlights the importance of clear and concise disclosures, particularly in the financial services industry.
As a consumer, it is important to carefully review the terms and conditions of any financial product or service before making a decision to use it. It is also important to regularly review your account statements and to promptly report any errors or discrepancies to your financial institution.
In conclusion, the Chime settlement agreement serves as a reminder to companies that deceptive marketing practices will not be tolerated and that consumers have a right to accurate and transparent information. For consumers, it is important to be vigilant and to carefully review the terms and conditions of any financial product or service before making a decision to use it.
