The National Advertising Division (NAD) of BBB National Programs determined that Chime Financial, Inc.'s advertising for its "SpotMe" program disclosed the material information necessary to ensure that claims about its program are substantiated and that Chime's "no overdraft fees" claims are supported.
Further, NAD found that the Chime homepage adequately qualifies its "no fees" claim so that consumers understand that out-of-network ATM fees are not among the hidden fees it eliminates. However, NAD recommended that Chime qualify claims on its "No Hidden Fees" webpage and television advertising to make clear that the eliminated fees do not include out-of-network ATM fees.
The following express claims were challenged by NAD as part of its independent routine monitoring of truth and transparency in U.S. national advertising:
-
"Banking with no hidden fees"
-
"Say goodbye to hidden fees when you bank through Chime. No overdraft fees. No minimum balance fees. No monthly fees. No foreign transaction fees."
-
"Say goodbye to hidden fees*" (at the bottom of the webpage: "*Out-of-Network cash withdrawal fees apply. Third-party and cash deposit fees may apply.")
-
"And if I'm ever in a pinch, Chime SpotMe even lets me overdraw my account fee-free on debit card purchases."
-
"I don't have to worry about overdraft fees. There's no surprises, no hidden fees."
NAD also challenged implied claims that:
-
When banking with Chime, consumers will not be charged any of the traditional fees that are imposed by traditional banks.
-
Consumers will never be charged a fee they had not anticipated at the time of signing up for Chime.
"No Overdraft Fees" Claims
NAD inquired into whether claims about Chime's "SpotMe" program disclosed material limitations of the program and whether its "no fees" and "no overdraft fees" claims were truthful and not misleading.
Based on the advertiser's explanation of its "SpotMe" program, NAD determined that the "SpotMe" advertising disclosed the material information necessary to ensure that its claims about the program are substantiated. The claims that the "SpotMe" program allows for "fee-free" overdraft or "up to $200 on debit card purchases with no overdraft fee" are truthful, as Chime does not charge overdraft fees. As a result, NAD determined that the "no overdraft fees" claims are supported.
"No Hidden Fees" Claims
Chime customers can use over 60,000 in-network ATMs without incurring any fees. If a Chime customer chooses to use an ATM out of that network, they will incur an out-of-network ATM fee.
NAD determined that, absent a context that limits the message, Chime's "no hidden fees" claims reasonably convey the message that consumers will not have to pay "hidden" fees that are often associated with traditional banks, including out-of-network ATM fees charged by their institution. Accordingly, the proximity and placement of qualifying language is an important factor in determining if consumers that see the advertiser's "no hidden fees" claims understand that Chime charges out-of-network ATM fees.
NAD found that the Chime homepage adequately qualifies its "no fees" claim, however NAD noted consumers could miss the small font disclosure at the bottom of Chime's "No Hidden Fees" webpage and that the claims presented in Chime's television commercials could more clearly qualify the "no hidden fees" claim.
Accordingly, NAD recommended that Chime modify its "No Hidden Fees" webpage and television advertising to qualify the "no hidden fees" claim to make clear that the fees it eliminates do not include out-of-network ATM fees.
In its advertiser statement, Chime stated that it "agrees to make enhancements consistent with NAD's recommendations." Further, the advertiser expressed its belief that it has "adequately qualified its advertising statements regarding the assessment of out-of-network ATM fees . . . nonetheless, Chime will consider the NAD's observations in undertaking enhancements to disclosures on the 'No Hidden Fees' webpage and in television advertising."
All BBB National Programs case decision summaries can be found in the case decision library. For the full text of NAD, NARB, and CARU decisions, subscribe to the online archive.
About BBB National Programs
BBB National Programs is where businesses turn to enhance consumer trust and consumers are heard. The non-profit organization creates a fairer playing field for businesses and a better experience for consumers through the development and delivery of effective third-party accountability and dispute resolution programs. Embracing its role as an independent organization since the restructuring of the Council of Better Business Bureaus in June 2019, BBB National Programs today oversees more than a dozen leading national industry self-regulation programs, and continues to evolve its work and grow its impact by providing business guidance and fostering best practices in arenas such as advertising, child-directed marketing, and privacy. To learn more, visit bbbprograms.org.
About the National Advertising Division
The National Advertising Division (NAD) of BBB National Programs provides independent self-regulation and dispute resolution services, guiding the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for advertising truth and accuracy, delivering meaningful protection to consumers and leveling the playing field for business.