Imagine this: You’re short on cash, your rent’s due, and a flashy app promises up to $250 instantly. Sounds like a lifeline, right?
But instead of helping you out of a tight spot, that app quietly signs you up for a subscription you didn’t clearly agree to, gives you a fraction of the money promised, and then makes it nearly impossible to cancel—even when you try to bail.
That’s exactly what the FTC says happened with Cleo AI.
💣 The Big Bombshell: $17 Million Judgment
The FTC hit Cleo AI with a $17 million fine—$10 million for consumer refunds and $7 million in penalties—after charging the company with deceptive marketing, hidden fees, and illegal subscription traps.
Cleo didn’t admit wrongdoing, but agreed to the permanent injunction and monetary judgment.
“Cleo lured consumers in with the promise of cash advances with no strings attached, then illegally enrolled them in a costly monthly subscription without their consent.”
— Samuel Levine, Director of the FTC’s Bureau of Consumer Protection
Source
🎯 What Cleo Promised vs. What Users Got
Let’s take a look at how Cleo’s pitch stacked up against reality:
🟢 Promised: “Get $250 today!”
🔴 Reality: Most people got $20–$70, and nearly no one got $250. Builder subscribers—who paid $14.99/month—had to jump through extra hoops and still almost never saw $500.
🟢 Promised: “Instant cash advances”
🔴 Reality: Only if you paid an extra $3.99–$9.99 express fee. Even then, the money might not show up until the next day.
🟢 Promised: “Easy to cancel anytime”
🔴 Reality: Not if you had an outstanding cash advance. Users were told they couldn’t cancel until they repaid, even if they no longer wanted the service. Some customers were charged for months despite multiple cancellation requests.
🔍 FTC Complaint Highlights: Deception in Action
The complaint lays out a disturbing pattern:
- Only 1% of Plus subscribers ever received the advertised $250 advance.
- Builder users who got the full $500? Basically zero.
- Cleo used pre-selected subscription plans, hard-to-read fine print, and tiny footnotes to bury the real terms.
- Many users were charged even after explicitly trying to cancel—and told it wasn’t possible due to an “active loan.”
- One customer said: “I paid $6 for this app, and it didn’t tell me what I was eligible for. If I knew it would be so low, I wouldn’t have signed up.”
💡 What the Court Ordered Cleo AI to Do (or Else)
Here’s what Cleo must now legally do, per the FTC’s Stipulated Order:
✅ Clearly disclose fees and limitations before charging users
✅ Obtain clear, unambiguous consent for recurring charges
✅ Make cancellation as easy as signing up—no more digital dead ends
✅ Stop making misleading promises about how much cash users can get
✅ Maintain records and compliance for at least 10 years
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
If Cleo violates these terms, the FTC can take further action—including making the entire order non-dischargeable in bankruptcy.
🚨 Why This Matters for You
This case isn’t just about Cleo. It’s about a growing trend of fintech apps using dark patterns—those sneaky design tricks that get you to click without understanding what you’re agreeing to.
Here’s how to protect yourself:
- 🔍 Audit your accounts regularly for surprise charges
- 🧠 Slow down before clicking “Subscribe” or “Start Free Trial”
- 📲 Use tools like Rocket Money to identify and cancel hidden subscriptions
- 📣 Report shady practices to the FTC at reportfraud.ftc.gov
✅ What to Do If You Used Cleo AI
The FTC plans to use part of the $17 million to issue refunds to affected users. Keep an eye on your inbox or mail, or check the FTC’s refund page for updates.
🧠 Final Thought: If It Smells Like a Scam…
If a company won’t tell you the real cost until after they get your bank info? That’s not financial help—it’s a trap.
If they make it easy to sign up and hard to cancel, they’re not helping you. They’re harvesting you.
💬 Have you ever been stuck in a shady subscription you couldn’t cancel? Let’s talk in the comments.
👉 Boop that like button, subscribe, and check out GetOutOfDebt.org for free resources and real answers.
And if you’re feeling overwhelmed by debt or financial stress, talk to my friend and trusted debt coach Damon Day. He’ll shoot you straight.
