Mobile Banking App Settles Allegations It Misled Consumers Regarding Access to Their Funds, Interest Rates

  • The Federal Trade Commission (“FTC”) reached a settlement with mobile banking app operator Beam Financial Inc. and its founder and CEO (collectively, “Beam Financial”) to resolve allegations that Beam Financial made false and misleading marketing promises in violation of the FTC Act.
  • The complaint alleged that Beam Financial promised users they would have constant access to their funds and earn high interest rates on their accounts of between 0.2 and 1.0 percent. In reality, users waited weeks or months to receive their money after requesting transfers out of their Beam Financial accounts, and many new users received interest rates as low as 0.04 percent and stopped earning any interest after requesting fund withdrawals.
  • Under the terms of the stipulated order, Beam Financial must fully refund the amounts, including interest, held in customer accounts, which total at least $2.6 million. In addition, Beam Financial is banned from operating products or services that can be used to move or store funds, including mobile banking apps, among other things.