Tip Your Banker?

This Week in Blunders – Dec. 29 - Jan. 4

“It's me, Dave. Open up, man.” – Cheech & Chong

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Dave has been asking for tips.

Dave is a neobank, which means new to banking. And if you are new to banking, you might not know that you do not have to tip your banker.

Let me tell you why Dave, in particular, does not need your tips.

• Dave is a fintech platform that lures low-income customers with $500 cash advances. It has a market capitalization worth more than $1 billion.

• Dave is a successful banker with a stock that soared 934% in 2024.

• Dave allegedly lies about where the tips go, according to a lawsuit the U.S. Justice Department announced on Monday.

• Dave’s app “uses a deceptive interface that does not offer a clear way to avoid tipping,” the lawsuit alleges.

“We’re not greedy bankers, like all those other suits. We care about hungry children. Don’t forget to tip.” (Illustration: AI generated.)

According to the lawsuit against Dave and its CEO Jason Wilk:

Dave’s app falsely represents to consumers that the company will purchase or pay for a certain number of meals for needy children based on the size of a customer’s tip, while in reality Dave keeps the vast majority of tips for itself and donates only a nominal sum to charity that is insufficient to purchase the stated number of meals.”

Dave asks for tips instead of fees for services such as cash advances and overdraft protection on checking accounts. Dave says it works out cheaper this way.

The Justice Department and the Federal Trade Commission disagree. The regulators allege that Dave is sacking customers with hidden fees and subscriptions that are difficult to cancel … and demanding bogus tips on top of it all.

Dave says, no way, man: “The amended complaint is a continued example of government overreach and includes numerous allegations that are based on various inaccuracies.”

Dave also said it’s getting rid of “optional tips” since it has become a point of contention with regulators.

“The Justice Department is committed to stopping companies and their executives from preying on financially vulnerable consumers with deceptive advertisements, hidden fees and subscriptions that are difficult to cancel,” said Principal Deputy Assistant Attorney General Brian Boynton in a news release.

We know that the practice of demanding tips though apps has completely spun out of control when a banker has its digital hands out.

Last summer, an app asked me to tip at a drive through window at an Einstein Bagels in Greenwood Village, Colo. I didn’t even walk inside to use the bathroom. It was a drive through, and a slow one at that. Oh, and my bagel sucked.

I notice Starbucks has the ol’ tip jar at its drive through windows, too.

“Some airport self-checkout kiosks ask for customers to tip when they are just buying a water bottle they've grabbed themselves,” reports Aaron Rennie at Investopedia in a recent piece on “tipflation.”

(Rennie is my former colleague from The Messenger. Nobody offered us tips for our hard work there.)

How about paying employees enough so that they don’t have to depend on the overtaxed kindness of strangers?

How about charging customers appropriately instead of guilting them for tips through a sneaky app?

How about that, Dave?

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