Tip Your Banker?
This Week in Blunders – Dec. 29 - Jan. 4
“It's me, Dave. Open up, man.” – Cheech & Chong
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.
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?
Siri, you nosy bitch
Your friends thought you were paranoid, but it appears that Siri really was hacking your conversations, even when you weren’t using your devices.
Apple agreed on Thursday to pay $95 million to settle a 5-year-old lawsuit alleging that the technology giant activated Siri to record conversations through iPhones and other gadgets for more than a decade, then shared the information it gathered with advertisers.
Apple isn’t admitting anything and a $95 million settlement is a pittance for a company with nearly $3.7 trillion in market value.
If the settlement is approved, victims might get a whopping $20, and the class-action lawyers will get nearly $30 million.
And to think I once scolded young boys for shouting rude commands at Siri when they got their first iPhones. Now, I hope she heard them.
Screw you, too, JetBlue
Low-cost airline JetBlue just landed the first-ever fine in aviation history for chronically delayed flights, the U.S. Department of Transportation announced Friday.
Half of the $2 million penalty will go to JetBlue customers who’ve already been screwed by flight delays or are about to be screwed in the next year if JetBlue’s shoddy on-time performance continues.
“Illegal chronic flight delays make flying unreliable for travelers,” said U.S. Transportation Secretary Pete Buttigieg in a news release. “Today's action puts the airline industry on notice that we expect their flight schedules to reflect reality.”
The regulator said it has ongoing investigations into other airlines.
In March, the department scuttled a merger between JetBlue and Spirit Airlines, which filed bankruptcy in November.
Can you imagine these two cheap-o carriers stuck on the tarmac together? Almost makes you want to walk.
Will Carvana crash?
Carvana’s big turnaround is a “mirage” created with “accounting tricks” and a “toxic loan book,” according to a report Hindenburg Research released Thursday.
Hindenburg examines companies it thinks are about to blow like the famous zeppelin in 1937, and it makes its money shorting their stocks.
Carvana, an online auto dealer with gimmicky car vending machines, called the report “intentionally misleading and inaccurate,” adding that it was aimed at benefitting short sellers. Its stock has dropped more than 10% since Hindenburg released the report.
Carvana was on the brink of bankruptcy in 2022 and 2023, but its stock rocketed 284% in in 2024 as the company convinced investors of a turnaround.
Throughout the comeback, insiders have been dumping billions in stock, Hindenburg notes.
The report raises questions about CEO Ernie Garcia III and his father, Ernest Garcia II, who is Carvana’s largest shareholder.
Hindenburg headlines its report: “A Father-Son Accounting Grift For The Ages.”
Like they say in the used car business: Buckle up.
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Al, thanks much for elucidating me as well as others. Was aware of some of this but not all!
You made me laugh my rear end off reading this today