By Jonathan Stempel
NEW YORK (Reuters) - Brigit, which operates a personal finance app, agreed to pay $18 million to settle U.S. regulatory charges it falsely promised instant cash advances of up to $250 to consumers who live paycheck to paycheck, and locked them into $9.99 per month memberships that were hard to cancel.
The settlement with the Federal Trade Commission (FTC) requires a judge's approval and was filed on Thursday in Manhattan federal court, where the agency submitted a related civil complaint.
It calls for New York-based Brigit, also known as Bridge It, to stop its alleged deceptive marketing, improve its disclosures and make it easy to cancel. The $18 million would go toward refunds for consumers.
A spokesman for Brigit said the company strongly disagreed with the FTC's "factually inaccurate" claims, and that customers are told before subscribing that they may be ineligible for $250 advances, but settled to put the matter behind it.
The FTC claims "go against everything we have worked so hard to build on behalf of our customers," the spokesman said.
Founded in 2017, Brigit said it has provided financial help to more than 4 million people, saving them $750 million through July.
According to the FTC, just 1% of consumers who paid monthly fees for Brigit's "Plus" memberships could obtain $250 cash advances, and 20% were denied advances entirely, despite being told they could get money "when they need it."
The complaint said Brigit in June 2022 began charging a 99 cent "express delivery" fee for instant advances despite promising "no hidden fees."
It also said Brigit used design tricks, known as "dark patterns," that made the cancellation process confusing and were designed to dissuade consumers from completing it.
"Brigit trapped those consumers least able to afford it into monthly membership plans they struggled to escape from," Sam Levine, director of the FTC consumer protection bureau, said in a statement.
(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis)