FTC Initiates PayPal Refund Process for FloatMe Settlement Recipients

FTC employs a diverse array of payment methods

The Federal Trade Commission (FTC) will commence the process of remitting refunded funds to consumers who it alleges were injured by the online cash advance provider FloatMe through PayPal. In a press release issued on Monday (Sept. 16), the FTC announced that PayPal payments will be sent on Sept. 23 to eligible consumers. The beneficiaries are required to redeem their PayPal payment within 30 days.

The FTC employs a diverse array of payment methods to distribute refunded funds to consumers, as indicated on its frequently asked questions (FAQ) page. According to the FAQ page, consumers may access an FTC website to determine whether the refund program in which they are participating is transferring funds via checks, debit cards, Zelle payments, or PayPal payments.

In the case of FloatMe, the refunds are the result of an action taken by the FTC in January. The regulator alleged that FloatMe promised quick and free cash advances to consumers who joined its service, but failed to deliver the promised advance amounts. The company also charged fees to obtain the cash quickly, made it difficult to cancel subscriptions, and discriminated against those who received public assistance, 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, according to the release.According to the release, the Federal Trade Commission (FTC) intends to issue refunds totaling over $2.6 million to 449,344 consumers who were FloatMe members and purchased immediate cash advances.

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Industry Comments

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.