Klover app users who paid an express fee or a tip on a cash advance may be covered by a proposed class action alleging Klover Holdings made high-cost loans without the disclosures and rate limits required by the Military Lending Act and the Truth in Lending Act. A federal judge denied Klover’s motion to dismiss in March 2026, but no class has been certified and there is nothing to file yet.
Allegations Only · No Settlement Yet
This article describes a class action complaint and a ruling on a motion to dismiss. The statements below are unproven allegations. Klover Holdings, Inc. has not been found liable, there is no certified class, and nothing to claim at this time. This page is informational and is not legal advice.
What Is This About?
Klover is a Chicago-based app that advances users small amounts of money ahead of payday and collects it back from their bank account on the scheduled date. A proposed class action, Moss v. Klover Holdings, Inc., claims those advances are loans in everything but name, and that the optional-sounding charges attached to them — an “express fee” for same-day money and a requested “tip” — are really the cost of credit.The named plaintiff, an active-duty U.S. Army staff sergeant, filed the case on April 18, 2025 in the Circuit Court of Cook County, Illinois. Klover moved it to the U.S. District Court for the Northern District of Illinois on May 22, 2025, where it is pending as No. 1:25-cv-05758 before U.S. District Judge Joan B. Gottschall.
On March 5, 2026, Judge Gottschall denied Klover’s motion to dismiss, holding that the complaint states claims under both the Truth in Lending Act (TILA) and the Military Lending Act (MLA). That ruling does not decide whether Klover broke either law. It means the case continues.
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What the Lawsuit Alleges
The complaint describes Klover’s “Klover advance” and “Balance Advance” products as ordinary cash advances repaid on payday. According to the filing, Klover markets access to up to $200 before payday, requires users to authorize a debit from the bank account where their paycheck lands, and schedules that debit for the next payday. The app allegedly gives users no way to cancel the scheduled repayment, and an account that is not repaid is suspended until it is.Two charges sit at the center of the case. Users who do not want to wait up to three business days for their money pay an express fee, which the complaint puts at $1.99 to $19.99. Klover also asks for a tip on each advance, and the complaint claims the app uses behavioral design techniques to push users to leave one. The plaintiff argues that for people short on cash before payday, both charges are optional only on paper.
Treating those charges as finance charges, the complaint calculates that the effective annual rate on the plaintiff’s advances often exceeded 300%, and that one advance exceeded 1,200%. The lawsuit alleges Klover’s agreements with service members violate the MLA by charging more than the 36% military rate cap, omitting the required credit disclosures, including a class action waiver and a mandatory arbitration clause, and using access to the borrower’s bank account as security. It separately alleges Klover gave none of the loan-cost disclosures TILA requires.
The complaint also claims Klover rewards users with “Klover Points” for sharing personal data and viewing ads, and that those ads often promote other cash advance apps, nudging users toward borrowing from several providers at once.
Klover’s Defense and the March 2026 Ruling
Klover argued that its advances are non-recourse: its terms say users are not legally obligated to repay, so it is not extending “credit” at all, and its tips and express fees are not finance charges. After briefing closed, Klover also pointed the court to a December 23, 2025 Consumer Financial Protection Bureau advisory opinion stating that certain earned wage access products are not credit under Regulation Z.Judge Gottschall rejected both arguments at the pleading stage. The court found that “debt” in the lending statutes is broader than the contract-law definition Klover proposed, and it relied on CFPB staff commentary treating a cash advance repaid by a scheduled debit from the consumer’s account as a payday loan. On the December 2025 opinion, the judge noted that it covers only providers that, among other conditions, do not assess individual users’ credit risk. The complaint alleges Klover uses a third-party underwriting service to analyze users’ bank transaction history daily and adjust how much they can get, which the court found enough, for now, to place Klover outside that opinion.
The court also adopted the reasoning of the other federal district courts that had ruled on similar apps, and found it plausible that Klover’s tips and express fees are finance charges.
Who Could Be Included
The complaint proposes two classes, neither of which has been certified:• Military Lending Act class: active-duty service members and their dependents who agreed to use a Klover advance, or a substantially similar product, on which Klover was paid a finance charge such as an express fee or tip.
• Truth in Lending Act class: anyone in the United States who agreed to use a Klover advance, or a substantially similar product, on which Klover was paid an express fee, tip or other finance charge.
The lawsuit asks the court to declare the service members’ agreements in violation of the MLA and to award MLA class members actual damages of at least $500 per violation plus punitive damages, along with actual and statutory damages for the TILA class and an order barring the practices going forward. None of that has been awarded.
Part of a Wider Fight Over Cash Advance Apps
The Klover ruling is one of a string of early decisions on the same question. The National Consumer Law Center’s April 2026 issue brief lists twelve rulings involving Brigit, Cleo, Dave, EarnIn, FloatMe, Grant Money, Klover, MoneyLion and Tilt (formerly Empower), each rejecting the argument that these advances fall outside TILA, the MLA or state credit laws at the motion stage. As of the Klover ruling, no federal appeals court had decided the issue, though appeals were pending in the Ninth Circuit in cases involving Dave and Empower.Related coverage: the New York Attorney General has sued MoneyLion and DailyPay over their paycheck advance fees, and the FTC has been sending refunds to Brigit customers in a separate enforcement matter. Service members who took pawn loans from FirstCash or Cash America may also want to see the FirstCash Military Lending Act settlement.
Klover has been sued before. A 2024 proposed class action in the Western District of Pennsylvania, Pierce v. Klover Holdings, Inc., ended in July 2024 when the named plaintiffs and Klover stipulated to dismiss their claims with prejudice; no class was certified in that case.
What Happens Next
With the motion to dismiss denied, the case moves into the stages that normally follow: Klover’s answer to the complaint, discovery, and eventually a motion for class certification. No class has been certified, and no settlement had been announced as of September 25, 2026. If the case settles or a class is certified, class members would be notified and any claim process would be announced then.Questions
Did the court decide that Klover's cash advances are loans?
Not on the merits. On March 5, 2026, the court ruled only that the complaint’s allegations, taken as true at this stage, plausibly describe credit and finance charges under the Truth in Lending Act and the Military Lending Act. Klover has not been found liable, and it can still contest the facts as the case proceeds.
Who would be in the proposed classes?
The complaint proposes two classes. A Military Lending Act class of active-duty service members and their dependents who used Klover’s advance product and paid Klover an express fee or tip, and a nationwide Truth in Lending Act class of anyone in the United States who did the same. Neither class has been certified.
Why does the Military Lending Act matter in cash advance app cases?
The Military Lending Act caps the annual rate on consumer credit to covered service members and their dependents at 36% and bars covered creditors from requiring those borrowers to arbitrate. If an app’s advances count as consumer credit, both rules can apply, which is why many of these suits are brought by service members. Whether Klover’s advances count is the central disputed question in this case.
Does the CFPB's December 2025 earned wage access opinion help Klover?
Klover argued it did. The judge found that the advisory opinion covers only providers that meet certain conditions, including not assessing the credit risk of individual users, and that the complaint plausibly alleges Klover uses a third-party service to assess users’ bank data and adjust advance amounts. At the pleading stage, that was enough to keep the opinion from ending the case.
Are other cash advance apps facing the same kind of lawsuit?
Yes. The National Consumer Law Center counted twelve court rulings through March 2026 involving apps including Brigit, Cleo, Dave, EarnIn, FloatMe, Grant Money, MoneyLion and Tilt (formerly Empower), each rejecting the argument that the advances fall outside credit law at the pleading or arbitration stage. Those are separate cases with their own classes.
Sources
• Memorandum Opinion and Order denying motion to dismiss, Moss v. Klover Holdings, Inc., No. 1:25-cv-05758 (N.D. Ill. Mar. 5, 2026)• Class action complaint and notice of removal exhibits, Moss v. Klover Holdings, Inc., Circuit Court of Cook County No. 2025CH04354 (filed Apr. 18, 2025), removed May 22, 2025 (N.D. Ill. Dkt. No. 1-2)
• Stipulation of Dismissal with Prejudice, Pierce v. Klover Holdings, Inc., No. 2:24-cv-00665 (W.D. Pa. July 1, 2024)
• National Consumer Law Center, “Courts Reject Claims that Payday Loan Apps Don’t Offer Loans” (April 2026)
