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FTC
Alleges Mobile Banking App Misled Users About Access to Their Funds, Failed
to Deliver on Promised High Interest Rates The Federal Trade Commission sued the
operators of a mobile banking app, alleging that they falsely promised users
high interest rates on their accounts and “24/7” access to their funds. In a complaint filed
in federal court, the FTC alleges that Beam Financial Inc. and its founder
and CEO Yinan Du, also known as Aaron Du, promised users of their free mobile
banking app that they could make transfers out of their accounts and would
receive their requested funds within three to five business days. Instead,
some users waited weeks or even months to receive their money despite
repeated complaints to Beam, while others said they never received their
money, according to the complaint. "Beam Financial promised convenient 24/7
access to savings, but then people had to wait weeks or months to get their
money," said Andrew Smith, Director of the FTC’s Bureau of Consumer
Protection. Many consumers said Beam’s failure to provide
their requested funds caused real financial harm, particularly for those who
have lost income due to the COVID-19 pandemic. Many of the reviewers of the Beam
app on the Apple App and Google Play stores complained that they did not
receive their requested withdrawals from Beam and had trouble reaching the
company either by phone or by email, according to the complaint. For example,
one user complained in a review that, “I am still without my $2,900 and Beam
doesn’t answer the phone or email. They’ve stolen my money during a
pandemic.” Consumers who did reach the California-based
company said Beam blamed delays in providing the requested money on issues
with unspecified “banking partners” or “technology partners” and promised the
delays were temporary, according to the complaint. In addition to making
it difficult for consumers to access their funds, Beam also failed to give
users the high interest rates the company promised, the FTC alleges. Beam
repeatedly claimed that users would receive “the industry’s best possible
rate” of at least 0.2 percent or 1.0 percent, according to the complaint. In
fact, many new users received a much lower interest rate of 0.04 percent and
stopped earning any interest after requesting that Beam return their funds. The FTC alleges that Beam’s misrepresentations
violate the FTC Act. The Commission vote authorizing the staff to
file the complaint was 5-0. The complaint was filed in the U.S. District
Court for the Northern District of California. NOTE: The Commission files a complaint when it has “reason to believe”
that the named defendants are violating or are about to violate the law and
it appears to the Commission that a proceeding is in the public interest. The
case will be decided by the court. The Federal Trade Commission works to promote
competition and to protect
and educate consumers. You can learn
more about consumer topics and report scams, fraud, and bad business
practices online at ReportFraud.ftc.gov.
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Affairs 202-326-2924 Staff Contact: Gregory Madden Bureau of Consumer
Protection 202-326-2426 Related Cases Media Resources |