The company that makes the personal financial app, Brigit, has agreed to pay $18 million to resolve regulatory allegations in the United States. The accusations stem from the company’s deceptive claims to have given customers living paycheck to paycheck quick cash infusions of up to $250 while locking them into difficult-to-cancel $9.99 monthly subscriptions.
The settlement with the Federal Trade Commission (FTC) was filed on Thursday in federal court in Manhattan, where the agency also filed a related civil lawsuit. The resolution is subject to judicial approval.
It demands that Brigit, also known as Bridge It, a company located in New York, end its purportedly dishonest marketing, enhance its disclosures, and make cancellations simple. Consumer refunds would be covered by the $18 million.
Brigit’s representative expressed significant disagreement with the FTC’s “factually inaccurate” allegations, adding that consumers are informed before subscribing that they could not be eligible for $250 loans. Nevertheless, the case was resolved to go on.
“Go against everything we have worked so hard to build on behalf of our customers,” the representative for the FTC claimed.
Since its founding in 2017, Brigit claims to have helped over 4 million individuals financially, saving them $750 million as of July.
The Federal Trade Commission (FTC) claims that of customers who paid monthly dues for Brigit’s “Plus” memberships, just 1% were able to receive $250 in cash advances, and 20% were completely refused advances even though they were informed they would receive money “when they needed it.”
In June 2022, Brigit allegedly started charging a 99 cent “express delivery” fee for quick advances, even though they had previously stated there would be “no hidden fees.”
Additionally, it claimed that Brigit employed “dark patterns,” or deceptive design techniques, to confuse users and discourage them from finishing the cancelling procedure.
“Brigit locked those customers who couldn’t afford it into membership plans that they found difficult to cancel,” stated Sam Levine, the FTC’s consumer protection division director, in a statement.