How FloatMe’s Illegal Actions Drowned Consumer Trust

A Promise of Help, A Reality of Harm

Imagine living paycheck to paycheck, when an unexpected bill throws your fragile budget into chaos. You see an ad for an app called FloatMe, a modern solution promising a lifeline: “Get Up To $50 Instantly!”. For people needing gas to get to work or cover a small emergency, this seems like a godsend. The company even targets you with mock testimonials of actors who, facing a crisis, downloaded the app and got “$50 instantly” for “no hidden fees”.

But according to a scathing complaint filed by the Federal Trade Commission (FTC), this promise was a calculated deception. For tens of thousands of Americans, including military families, seniors, and the disabled, the reality of FloatMe was not a lifeline but a trap—one that exploited their desperation for a recurring subscription fee.

One consumer, denied help because their steady income came from Social Security, put it bluntly: “I’m not paying you for nothing”. This is the story of how a fintech company allegedly built a business by preying on the very people it claimed to serve.

The Corporate Playbook: A Blueprint for Deception

The FTC complaint alleges FloatMe’s business model was not an unfortunate accident but a deliberately engineered system of deception and extraction, overseen by its co-founders, Joshua Sanchez and Ryan Cleary. The strategy was multifaceted, targeting users at every step of their journey.

The Bait-and-Switch

First, FloatMe blanketed social media with the promise of “up to $50” in instant cash. Yet, this was a promise the company allegedly knew it would not keep. The maximum advance any new user could actually receive was just $20. In a recent quarter, less than 5% of users ever received more than that amount, and a minuscule half of one percent ever saw the advertised $50. Co-founder Sanchez admitted internally they had to abandon plans for a $50 initial advance due to “cash constraints” —yet the deceptive advertising continued unabated.

When users inevitably complained about the lower amount, the company deployed another layer of deception. FloatMe told them an “automated process” would increase their limit over time. But according to the FTC, this was, in the words of one of the company’s own employees, simply “a lie”. No such automated system existed.

The Hidden Costs of “Instant”

The deception didn’t stop there. FloatMe advertised its cash advances as “free” and available “in minutes” for just the monthly subscription fee. But in reality, users who needed money instantly—the very definition of an emergency—were forced to pay a surprise, undisclosed $4 fee. Those who didn’t pay had to wait up to three days. This hidden fee represented a staggering 20% of the actual $20 advance, turning a small loan into an expensive transaction for those who could least afford it.

Designed to Trap

Perhaps most cynically, the FTC alleges FloatMe was designed to make escape nearly impossible. Co-founder Sanchez was explicit about this strategy in internal documents, stating the goal was to “make it difficult for someone to quit” by employing “friction”.

Initially, users could only cancel by emailing a customer support department that was intentionally kept understaffed. Later, FloatMe introduced in-app and webform cancellation paths that were plagued by technical glitches and “faulty” buttons. When frustrated users contacted support directly, agents were instructed to use a pre-written script called the “Cancel Prevention macro” to ignore the request. All the while, the monthly fees continued to drain from users’ bank accounts.

A Cascade of Consequences: The Real-World Impact

The cumulative effect of FloatMe’s alleged practices was a significant financial and emotional toll on a vulnerable population.

Economic Ruin for the Precarious

For people living on the edge, every dollar counts. FloatMe’s business model turned into a machine for extracting small, recurring amounts that added up to substantial harm.

Users were not only hit with the $1.99 monthly fee and the hidden $4 instant transfer fee, but many were also “double or triple” charged due to billing errors the company knew about but failed to fix. One co-founder blamed the errors on being too busy with “fundraising” to “fix shit”. This cavalier attitude had real consequences, with consumers reporting that the unauthorized charges caused their bank accounts to go negative.

Systemic Discrimination and the Erosion of Trust

Most egregiously, the FTC alleges FloatMe practiced illegal discrimination. The company categorically refused to provide advances to anyone whose income came from “gig work, … military benefits, and government assistance programs” like Social Security. Yet, it knowingly enrolled tens of thousands of these individuals—veterans, seniors, the disabled—and charged them subscription fees for a service they were blocked from ever using.

This practice not only took money under false pretenses but also reinforced the societal message that those reliant on public assistance are not creditworthy, deepening economic injustice.

Analysis: A System Designed for This

FloatMe is not a story of one “bad apple” company. It is a predictable outcome of a neoliberal economic system that sees social problems as markets for exploitation. The financial precarity of millions of Americans, driven by wage stagnation and a shredded social safety net, created the “market” FloatMe entered.

The company’s tactics are hallmarks of modern predatory capitalism. The use of “friction” and “dark patterns” to trap consumers is a celebrated strategy in the tech world, designed to maximize user retention and recurring revenue at the expense of user autonomy. The internal admission that “no one thinks it’s a big deal” to fix wrongful charges because the fee is “only $2” reveals a corporate culture where small-dollar harms against the poor are dismissed as insignificant, even as they accumulate into millions in revenue. This is a system that privatizes profit while socializing harm.

Dodging Accountability: The Fight for Justice

The FTC’s complaint is the first step toward accountability. By suing not only FloatMe Corp. but also its co-founders Joshua Sanchez and Ryan Cleary individually, the agency is signaling that executives cannot hide behind the corporate veil.

However, justice in these cases is often incomplete. A monetary settlement, while providing some restitution, can be treated by corporations as a mere “cost of doing business.” True accountability requires not just fines, but permanent injunctions to halt these practices and a clear message to the entire fintech industry that preying on vulnerability will not be tolerated. This case will be a crucial test of whether our legal system can deliver meaningful consequences for corporate actions that inflict widespread, systemic harm.

Reclaiming Power: Pathways to Real Change

Solving the problem FloatMe represents requires more than one lawsuit. It demands systemic reform.

• Strengthen Regulation: The cash-advance and fintech industries require robust federal oversight to prevent deceptive advertising and the use of manipulative “dark patterns.”
• Enforce Anti-Discrimination Laws: The Equal Credit Opportunity Act (ECOA) must be aggressively enforced to ensure that receiving public assistance does not disqualify someone from accessing credit.
• Empower Consumers: Regulators must mandate simple, one-step cancellation processes for all online subscriptions, removing the “friction” companies use to trap users.

Ultimately, the real solution lies in addressing the root economic precarity that makes apps like FloatMe seem necessary in the first place, through policies that ensure living wages, a strong social safety net, and a just economy for all.

Conclusion: A Story of a System, Not an Exception

This whole scandal tells the story of how the promise of technological innovation can be twisted into a tool for extracting wealth from the financially desperate. FloatMe is a product of a system that incentivizes profit above people, a system that will continue to produce such outcomes until we demand fundamental change.

Here is a press release from the FTC website about this too!: https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-acts-stop-floatmes-deceptive-free-money-promises-discriminatory-cash-advance-practices-baseless