Broke on Purpose: How FloatMe Built a Subscription Trap for America’s Most Financially Vulnerable
TL;DR
- FloatMe Corp., co-founded by Joshua Sanchez and Ryan Cleary, launched a cash advance app in 2019 that promised consumers up to $50 instantly with no hidden fees. The FTC filed suit on December 29, 2023, alleging eight separate violations of federal consumer protection and anti-discrimination law.
- The $50 promise was a lie from day one. FloatMe capped new users at $20 maximum, and in its most recent reported quarter, fewer than 5% of consumers ever received more than $20. Only 0.5% of users ever received the full $50 advertised.
- Getting money “instantly” required paying a hidden $4 fee that was never disclosed before signup. Without paying it, users waited up to three days for funds that were advertised as arriving in minutes. For a $20 advance, that $4 fee represents a 20% surcharge on the stated value of the service.
- Tens of thousands of users who receive Social Security disability benefits, Social Security retirement income, military benefits, gig work income, or unemployment payments were enrolled and charged monthly fees while being categorically blocked from ever receiving a single cash advance. This practice violates the Equal Credit Opportunity Act.
- FloatMe built deliberate friction into every cancellation path. Co-founder Sanchez admitted in writing that the cancellation processes were designed to “make it difficult for someone to quit.” Internal staff acknowledged the system charged people for months after they tried to cancel. The company deployed a script internally called the “Cancel Prevention macro” to stall cancellation requests.
- Defendants Sanchez and Cleary personally reviewed and approved the deceptive advertising, the cancellation obstruction practices, and the cash advance limit policies, making them individually named defendants in the federal complaint.
- FloatMe was aware that it was double- and triple-billing consumers. Cleary attributed early billing errors to the founders being “more focused on fundraising than accurate billing.” A supervisor later confirmed billing issues persisted for years and that no one at the company treated them as serious because the fee was “only $2.”
What It Actually Costs to Be Poor in America and Trust an App
Imagine you drive for a rideshare company. You put in your hours. The deposit hasn’t cleared yet. Your gas tank is empty. You saw an ad that said you could get $50 right now, instantly, no interest, no credit check. You download the app. You hand over your bank account credentials. You pay $1.99. And then the app tells you: you can have $20. Maybe. And actually, it’ll take three days unless you pay another $4.
That scenario isn’t hypothetical. According to the FTC’s complaint, it played out for tens of thousands of people who live paycheck to paycheck across the United States. The entire advertising architecture of FloatMe was constructed to reach people in exactly that moment of desperation, promise them relief, and then extract fees from them instead.
For the disabled, the betrayal is even more deliberate. If you receive Social Security Disability Insurance, FloatMe considers you to have no valid income. Not insufficient income. No income. One consumer said this directly to FloatMe: “your service always denies me because I am disabled and get a steady monthly income from social security once a month since 2012, but according to you[], I have no valid income history.” FloatMe kept charging that person their monthly subscription fee. The service FloatMe sold was never available to them. It never would be. FloatMe knew this, and kept taking money anyway.
The veterans who receive military benefits and were caught in the same trap deserve to be named in this ledger too. So do the gig workers. The rideshare drivers. The delivery couriers. The commissioned workers and servers who live on tips. FloatMe explicitly excluded all of these income sources from consideration, then silently enrolled these workers, charged them, and offered them nothing in return. The exclusion wasn’t in the ads. It wasn’t in the enrollment flow. It was buried in a FAQ page that consumers never had to visit to hand FloatMe their bank account information.
Then there is the trap that kept snapping shut even when people tried to leave. Consumers who attempted to cancel reported sending emails, submitting webforms, hitting cancel buttons in the app, and receiving confirmation messages, only to find FloatMe still debiting their accounts weeks or months later. One consumer cancelled three times on the app, emailed three times, received written confirmations of cancellation, and was still charged. Another woke up to a negative bank balance from a FloatMe charge on an account they believed had been closed for months. When you have nothing in your account, a $1.99 charge that triggers an overdraft fee is not a minor inconvenience. It is a cascade.
The internal language FloatMe used says everything. Co-founder Joshua Sanchez, in a written internal communication, acknowledged that the cancellation paths FloatMe designed “of course make[] it difficult for someone to quit.” The goal was not to provide a service. The goal was retention through obstruction. When someone downloaded FloatMe because they were drowning, the app was engineered to hold them under a little longer.
The Documents They Cannot Walk Back
The FTC’s complaint does not rely on inference or interpretation. It quotes FloatMe’s own internal communications and documents. These words came from inside the company.
“Float Limits are set automatically by the Float system” and “Float limits cannot normally be changed by our support team.”
— FloatMe’s standard customer service response to users asking why their advance limit hadn’t increased, as cited in the FTC complaint (Paragraph 36).
- This statement is directly contradicted by FloatMe’s own internal documents. The FTC’s complaint establishes that limits were raised manually, only upon explicit request, only for users who had been subscribed at least five months, repaid nine consecutive advances on time, and averaged at least $600 in their last three paychecks.
- By telling users the “system” handles increases automatically, FloatMe prevented consumers from understanding they had the ability to request one, while simultaneously telling requesting consumers that support couldn’t help them anyway. Users were trapped in a loop.
[A FloatMe supervisor described the company’s statements to consumers as] “a lie.”
— Internal FloatMe communication, as cited in the FTC complaint (Paragraph 38).
- This admission came from inside FloatMe’s own management chain. A supervisor acknowledged in writing that the company’s communications about automatic float limit increases were false. The word “lie” is the company’s own descriptor, not the FTC’s characterization.
- The FTC cites another internal document alongside this admission that acknowledges support agents do increase limits for certain consumers upon request, despite the “official stance” being that they cannot. The company maintained two contradictory operational realities: the one told to users, and the one that actually existed.
“The issue was us running two instances while fundraising, while pushing out to members without fixing shit.”
— Co-founder Ryan Cleary, in an internal communication acknowledging that double and triple billing of consumers occurred while the founders prioritized fundraising, as cited in the FTC complaint (Paragraph 47).
- Cleary directly attributed the billing errors not to a technical glitch but to a deliberate organizational priority: raising money took precedence over accurate charges to existing customers. Consumers were double- and triple-billed for fees so the founders could close their next funding round.
- Despite this admission, the billing problems continued for years. A supervisor later confirmed the issue was still active and noted the company’s internal reaction was indifference because the subscription was “only $2.” That framing reflects how little the company valued the financial impact on its customer base.
“I downloaded this app because I was struggling and needed help and all it has done is make things worse and never offer remedy.”
— A consumer complaint to FloatMe, as quoted in the FTC complaint (Paragraph 60).
- This consumer reported that the cancellation link they were provided was expired, leaving them with no mechanism to stop FloatMe from charging them. They reached a dead end in every direction.
- The FTC included this quote to illustrate that consumers who came to FloatMe in genuine financial need were left materially worse off, with active recurring charges and no functional path to exit.
“Your service always denies me because I am disabled and get a steady monthly income from social security once a month since 2012, but according to you[], I have no valid income history.”
— A consumer complaint to FloatMe, as quoted in the FTC complaint (Paragraph 66).
- This consumer made their income source explicit: Social Security Disability Insurance received consistently for over a decade. FloatMe categorized this as zero valid income, making them permanently ineligible for any advance.
- FloatMe enrolled this consumer and continued charging subscription fees knowing full well they could never receive the core service they were paying for. This is the direct conduct cited in the ECOA discrimination count of the complaint.
“[T]he cancel buttons were not working” / “clearly the developers created a faulty app with a spotty cancelation feature to pull $2.99 from unsuspecting accounts.”
— Consumer complaints to FloatMe, as quoted in the FTC complaint (Paragraph 60).
- Multiple consumers independently identified that the cancellation mechanism appeared deliberately faulty rather than accidentally broken. The FTC’s complaint corroborates this with Sanchez’s own admission that the cancellation paths were designed to create “friction.”
- The FTC cites internal FloatMe records showing the in-app cancel buttons had been reported as non-functional for years without being fixed. A consumer-identified pattern (faulty design to extract recurring charges) is substantiated by the company’s own written communications.
— Co-founder Joshua Sanchez, in an internal communication, as cited in the FTC complaint (Paragraph 52). He described this as FloatMe’s growth strategy.
Who Gets Hurt and How Much
Public Health
Financial stress is a documented driver of physical and mental health deterioration. FloatMe marketed specifically to people already under that stress, then compounded it.
- Consumers who were living paycheck to paycheck and expected a $50 cash advance to cover an emergency received $20 at most, and sometimes nothing. The FTC complaint documents users who went to FloatMe specifically to cover gas, utility bills, and unexpected costs and were left without the funds they needed.
- Disabled Americans on Social Security Disability Insurance, a population with statistically lower income and higher medical expenditure, were charged recurring fees for a service they were structurally prevented from using. This diverted limited fixed-income funds toward a product that offered them zero return.
- Consumers who discovered their accounts were not cancelled and faced unexpected debits reported account balances going negative. Bank overdraft fees typically run $25 to $35 per incident, meaning a $1.99 FloatMe charge could trigger a compounding financial harm five to seventeen times its face value for someone with low or zero buffer in their account.
- Veterans and military benefit recipients were categorically excluded from FloatMe’s core service. These consumers, who may also experience barriers to traditional credit access, were offered a false alternative and charged for it.
Economic Inequality
FloatMe’s entire business model drew its revenue from the financial precarity of its target population. Every design decision described in the FTC complaint transferred money upward.
- The $4 instant transfer fee, applied to what the FTC describes as a true average advance of approximately $20, represents a 20% fee on the loan’s actual value. Annualized, this far exceeds any fee structure that would be disclosed and regulated under traditional lending law. FloatMe avoided that scrutiny by calling the advance a “Float” and the fee a “transfer fee.”
- Tens of thousands of consumers paid recurring monthly subscription fees of $1.99 or $4.99 while categorically ineligible for the service. The FTC’s complaint confirms this figure in internal FloatMe records. The company collected money from a population it had already determined would never receive a benefit in return.
- FloatMe’s targeted advertising on Facebook, Instagram, and TikTok, using fake testimonials featuring emergency scenarios and $50 promises, specifically targeted lower-income consumers. The FTC’s complaint describes these as ads showing actors describing urgent cash needs, learning about FloatMe, and immediately receiving $50, a scenario the FTC describes as fictitious.
- Co-founder Cleary acknowledged in writing that billing errors that double- and triple-charged consumers were not fixed because the founders prioritized fundraising. The people being harmed were the same people who had enrolled because they needed $50 to get through the week. Their financial harm was subordinated to the company’s capital raise.
- Gig workers, who already face income instability that makes traditional credit harder to access, were among the excluded groups. FloatMe did not count gig income as valid income for advance eligibility. These workers, who generate revenue for platforms worth billions, were told their earnings didn’t count.
What You Were Told vs. What Was Hidden
FloatMe’s advertising and enrollment flow maintained a systematic gap between what was said and what was real. The chart below maps that gap across every major claim.
The Real Cost of a $20 FloatMe Advance
FloatMe advertised a single product: a $50 instant cash advance for $1.99/month. The FTC complaint reveals a product with multiple undisclosed cost layers and structural restrictions invisible to users at signup.
Translating the Numbers Into Human Terms
Who Ran This and Who Knew
The FTC named individual defendants alongside the corporation, establishing a direct line of personal accountability from corporate decisions to consumer harm.
Who to Pressure and What to Do
The FTC has filed. The named defendants have the authority and the responsibility. Here is who holds accountability and where organizing energy belongs.
Named Defendants
- Joshua Sanchez, Co-Founder and Officer, FloatMe Corp. Personally reviewed and approved the cancellation practices, advertising claims, and cash advance limit policies cited in the complaint. Resides in San Antonio, Texas, Western District.
- Ryan Cleary, Co-Founder and Former Officer and Board Member, FloatMe Corp. Personally reviewed and approved the same policies. Authored the internal support article containing false information about how consumers could earn limit increases. Resides in Cleveland, Ohio.
- FloatMe Corp., 110 E Houston St., San Antonio, TX 78205-2991. The corporate entity through which all charged practices were executed.
Regulatory Watchlist
- Federal Trade Commission (FTC): The filing agency. Filed December 29, 2023, in the Western District of Texas, San Antonio Division. The FTC is seeking permanent injunction, monetary relief, and other relief. File additional consumer complaints at ftc.gov/complaint to build the record.
- Consumer Financial Protection Bureau (CFPB): Relevant given the ECOA violations and the credit product structure. Submit complaints about earned wage access apps and hidden fee structures at consumerfinance.gov/complaint.
- Social Security Administration (SSA) Inspector General: FloatMe’s blanket exclusion of Social Security beneficiaries from its credit product may intersect with federal disability rights frameworks beyond ECOA.
- Department of Justice (DOJ), Civil Rights Division: The ECOA discrimination count implicates civil rights enforcement infrastructure. The DOJ has authority to pursue parallel enforcement of ECOA violations.
- State Attorneys General: Texas and Ohio, the home states of the named defendants, have consumer protection divisions with authority to act on deceptive trade practices independent of the federal case.
Direct Action and Mutual Aid
- If you paid FloatMe subscription fees while categorically ineligible for advances due to public assistance income, document every charge and submit a formal complaint to the FTC at ftc.gov/complaint. The more complainants on record, the stronger the monetary relief case.
- Gig worker organizations, disability rights groups, and veteran advocacy organizations should coordinate with FTC investigators to submit documented harm statements. The complaint’s consumer quotes demonstrate that individual testimony is being incorporated into the legal record.
- If FloatMe is still charging you, contact your bank directly to dispute unauthorized charges and request a stop payment on future FloatMe debits. Banks are required to investigate unauthorized debit disputes under Regulation E.
- Share the FTC complaint document in gig worker forums, disability communities, and veteran service organization networks. The consumers most harmed by this scheme are often those with the least access to information about their legal rights.
- Mutual aid networks supporting people in financial precarity should add earned wage access app literacy to their financial education programming. FloatMe is one of many apps that use this business model. The deception patterns the FTC describes, including hidden fees and obstruction cancellation, are common across the sector.
The source document for this investigation is attached below.
There is a press release about the FloatMe scam and its $2.6M money return to the victims on the FTC’s website too! Please feel free to give it a clickity-click if you please: https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sends-more-26-million-consumers-harmed-floatmes-deceptive-discriminatory-lending-practices
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