Hello Digit, LLC
On August 10, 2022, the Bureau issued an order against Hello Digit, LLC (“Hello Digit”), a financial-technology company that offers consumers an automated-savings tool. When consumers sign up for the service, Hello Digit uses a proprietary algorithm to make automatic transfers from the consumer’s checking account, called “auto-saves,” to an account held in Hello Digit’s name. Hello Digit represented that the tool “never transfers more than you can afford,” provided a “no overdraft guarantee,” and represented that, in the unlikely event of an overdraft, Hello Digit would reimburse consumers. The Bureau found that Hello Digit engaged in deceptive acts or practices because, in fact, Hello Digit’s automated-savings tool routinely caused consumers’ checking accounts to overdraft and Hello Digit did not always reimburse consumers for overdraft fees caused by the auto-save tool. The Bureau also found that as early as mid-2017, Hello Digit deceived consumers when it represented that it would not keep any interest earned on consumer funds that it was holding, when in fact Hello Digit kept a significant amount of the interest earned. The order enjoins Hello Digit from making any misrepresentations related to its auto-save tool and requires that Hello Digit provide at least $68,145 in redress to all consumers who were denied reimbursement requests for overdraft fees caused by Hello Digit’s auto-save tool. Hello Digit must also pay a $2.7 million penalty.
CFPB Takes Action Against Hello Digit for Lying to Consumers About Its Automated Savings Algorithm