FinTech challenger bank Chime can continue using terms like “no overdraft fees” and “no hidden fees” after the National Advertising Division (NAD) of BBB National Programs determined that the advertising for its “SpotMe” program disclosed the necessary information.
NAD found that Chime’s homepage contains adequate wording. However, it took issue with the size of the font that qualifies the “no fees” claim, and also noted that Chime’s television commercials “could more clearly qualify the ‘no hidden fees’ claim,” according to a press release on Tuesday (Dec. 28).
See also: Chime Rolls Out Cash Deposits at Walgreens
It was also recommended to Chime that its webpage and TV ads make it clear that “no fees” don’t apply to charges incurred by out-of-network ATMs. Chime has 60,000 in-network ATMs customers can use without incurring any fees.
“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,” the press release says.
Read more: Eliminating Overdraft Fees Isn’t Easy Fix for Banks, Customers
Chime said in its advertiser statement that it “agrees to make enhancements consistent with NAD’s recommendations.”
The FinTech also said that it believes 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.”
Founded in 2013 by current CEO Chris Britt and Chief Technology Officer Ryan King and headquartered in Silicon Valley, Chime’s banking services are provided by The Bancorp Bank or Stride Bank.
The FinTech has more than 13 million active users and was valued at $25 billion, following a $750 million fundraising effort in August.
NAD reviews national advertising in all media, and the decisions it makes are intended to set consistent standards for advertising truth and accuracy in the U.S.
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