The Federal Trade Commission is accusing Dave Inc., a Los Angeles-based payments app, of misleading its financially vulnerable customers about the fees it charges and the amount of money it distributes.

In a complaint filed Tuesday, the agency alleges that even though Dave advertises it offers $500 advances “instantly” only a “tiny” number of customers receive anything close to this amount. It also says customers are unaware that they have to pay a fee to get money immediately, or wait several days, and that the app charges a default 15% “tip” that many customers don’t. don’t know they’re paying.

The federal lawsuit filed in Los Angeles, which includes additional allegations of wrongdoing, seeks a permanent injunction to prevent future violations of FTC regulations and a 2010 law that regulates online commerce.

“Dave lured consumers living paycheck to paycheck with false claims of large dollar advances, then reached into their pockets to give himself a so-called ‘tip,'” said Samuel Levine, director of the agency’s Bureau of Consumer Protection, in a statement.

Dave’s founder and chief executive Jason Wilk declined to comment, but the company issued a statement disputing the allegations. He said he intends to “vigorously defend” himself and claimed that none of the allegations in the lawsuit, if proven, would prevent the app from charging fees or “optional tips,” but rather concerned issues related to “consumer disclosures and consent.”

Dave’s shares, which are up more than 700% since last year, were up 13% at $42.56 in morning trading on the Nasdaq.

The lawsuit was approved by a bipartisan 4-1 vote from the FTC, with Republican Commissioner Andrew Ferguson joining Chairwoman Lina Kahn and the board’s two other Democrats voting in favor. Kahn’s term has expired and she is widely expected to be replaced by the new Trump administration.

The lawsuit was the first time the agency targeted the practice of “tipping,” which other cash advance apps such as MoneyLion also employ.

However, it has filed two similar lawsuits against cash apps. Brigit And Float meaccusing them of promising large advances for free and then charging fees for immediate access to the money. The two companies reached a settlement with the agency, agreeing to change their practices and reimburse customers.

The Consumer Financial Protection Bureau targeted tips charged by companies such as DailyPaywhich typically partner with employers to give workers access to money before payday. Earlier this year, she proposed regulations that would include certain tips and expedited delivery fees in the total finance charges disclosed on these advances.

The lawsuit against Dave accuses the company of charging “express fees” of $3 to $25 and misleading customers into tipping the default 15% through a misleading interface on the app which links tips to “healthy meals” for children in need – while only a fraction of tips go to charity.

It also accuses the company of charging a $1 monthly fee and making it extremely difficult for customers to stop the fees.

Dave’s statement said the company was in the midst of “good faith negotiations” over the allegations when the agency decided to take legal action.