Chime Lawsuit 2025, Your Money Could Be Waiting—Here’s the Reality Behind the Allegations
Chime lawsuit 2025 involves multiple legal battles: a Washington state class action alleging illegal spam text messages under CEMA, CFPB enforcement requiring $4.55 million in refunds and penalties for delayed account closures, and California penalties totaling $2.5 million for poor customer service. Washington residents who received unsolicited Chime referral texts could receive $500 per message, while consumers nationwide who faced delayed refunds after closing accounts may be owed at least $150. The Charles v. Chime Financial case (filed July 2025) remains active heading into 2026, with potential settlements mirroring the $12.5 million Cash App and $9 million Robinhood payouts for similar violations.
What Is the Chime Lawsuit Really About?
If you’ve used Chime or received a text inviting you to join, you’re not alone—and you might be owed money. The San Francisco-based fintech giant is fighting legal battles on multiple fronts in 2025, facing allegations that could cost the company tens of millions in settlements.
The most significant case centers on Chime’s “refer-a-friend” program. Washington resident Taft Charles filed a class action lawsuit in July 2025 alleging that Chime violated state law by sending—or helping existing customers send—unsolicited promotional text messages. These texts typically read something like: “We’ll both earn $100 when you join Chime and receive a qualifying direct deposit!”
But here’s the problem: recipients never gave permission to receive these messages.
The Three Major Legal Battles
Chime faces three distinct legal challenges as we head into 2026:
1. Washington Text Message Class Action (2025)
- Case: Charles v. Chime Financial Inc., Case No. 2:25-cv-01361
- Court: U.S. District Court for the Western District of Washington
- Filed: July 18, 2025
- Status: Active, with Chime filing dismissal motion in October 2025
2. CFPB Enforcement Action (2024)
- Violation: Illegally delaying consumer refunds on closed accounts
- Penalty: $3.25 million fine
- Consumer Redress: $1.3 million minimum
- Status: Settled May 2024, payments being distributed
3. California DFPI Consent Order (2024)
- Violation: Unfair complaint handling practices
- Penalty: $2.5 million
- Status: Settled October 2024, remediation underway
The Reality Behind the Text Message Allegations
The Washington lawsuit focuses on a simple but powerful consumer protection: you shouldn’t receive spam texts just because your friend uses a banking app.
How the Referral Program Worked
Chime’s referral system offered financial incentives to both parties. Existing users could earn $100 for each friend who signed up and received a qualifying direct deposit. The friend also got $100. To facilitate this, Chime provided the technical means—essentially button clicks—for users to mass-text their contacts.
According to the complaint, Chime “violated and continues to violate CEMA by initiating commercial text messages and assisting its existing customers in the transmission of commercial text messages to potential new customers without the recipients’ clear and affirmative advance consent.”
What Makes This Illegal?
Washington’s Commercial Electronic Mail Act (CEMA), enacted in 1998 and expanded in 2003, is one of the strictest anti-spam laws in the nation. The law explicitly prohibits:
- Sending promotional texts without prior consent
- Assisting others in sending such texts
- “Gamifying” referral systems that encourage mass texting
The law carries teeth: $500 per violation. If you received multiple texts, each one counts separately.
Legal Precedents Point to Major Settlement
Two recent cases provide a roadmap for what Chime might face:
Robinhood Settlement: $9 Million (2024)
In February 2024, a federal court approved a $9 million settlement for Robinhood Financial’s refer-a-friend program that violated CEMA. The allegations were nearly identical to those facing Chime.
Cash App Settlement: $12.5 Million (2025)
In mid-2025, Block Inc. agreed to pay $12.5 million to resolve claims that Cash App’s “Invite Friends” referral program violated CEMA by incentivizing users to send unsolicited texts.
Based on these precedents, legal experts estimate a Chime settlement could reach $10-15 million if the case proceeds similarly.
The CFPB Refund Scandal: When Your Own Money Is Held Hostage
While the text message lawsuit grabs headlines, many consumers faced a more immediate crisis: Chime holding their money hostage after they closed accounts.
The Timeline of Delayed Refunds
Until 2021, Chime promised to refund account balances within 14 days of closure. But thousands of consumers waited weeks or months for their money.
The CFPB found that Chime:
- Failed to issue refunds within the promised 14 days in thousands of cases
- Kept consumer money for more than 90 days in thousands of instances
- Forced consumers to seek expensive credit alternatives to cover basic expenses
“Chime’s customers had to wait weeks or months for access to their own money and were forced to use alternative funds to cover their essential expenses,” said CFPB Director Rohit Chopra.
What Caused the Delays?
Chime blamed a “configuration error with a third-party vendor during 2020 and 2021.” While the company claims it fixed the issue and issued refunds, the CFPB determined the conduct violated federal law.
Who Gets Paid?
Under the May 2024 CFPB order, Chime must pay:
- At least $1.3 million in consumer refunds
- $3.25 million penalty to the CFPB’s victims relief fund
- Generally, affected consumers receive at least $150 if they had a minimum $10 balance after 14 days from closure
The CFPB is automatically distributing funds to eligible consumers—no claim form required.
California Customer Service Failures
In October 2024, California’s Department of Financial Protection and Innovation (DFPI) hit Chime with a $2.5 million penalty for unfair complaint handling.
The investigation revealed that Chime:
- Failed to properly train customer service representatives
- Didn’t adequately staff its support operations
- Handled complaints inaccurately and slowly
Under the consent order, Chime must:
- Provide 24/7 customer service support
- Ensure sufficient staffing and training
- Implement policies for accurate complaint handling
- Report to DFPI annually for two years
Who Qualifies for the 2025 Text Message Lawsuit?
To join the Washington class action, you must meet specific criteria:
Location: Washington State resident when you received the text
Message Type: Referral text about joining Chime
Source: Message came from a friend, family member, or contact (not directly from Chime)
Content: Message promoted Chime and likely mentioned the $100 referral bonus
Consent: You never gave prior permission to receive marketing texts from Chime
What Chime Says in Its Defense
In October 2025, Chime filed a motion to dismiss the class action, arguing its referral program fits “squarely” within CEMA’s statutory exemption for legitimate business activities.
The company maintains:
- Users voluntarily choose to send referral texts
- Recipients are personal contacts, not random spam targets
- The program qualifies as legitimate business communication
Legal experts note this defense faces an uphill battle given the Robinhood and Cash App precedents, where courts rejected similar arguments.
What Happens Next in 2026?
Based on typical class action timelines and the pending motion to dismiss, here’s what to expect:
Q1 2026: Court ruling on Chime’s dismissal motion
- If dismissed: Case ends (though appeals are possible)
- If denied: Case proceeds to discovery phase
Q2-Q3 2026: Discovery and depositions
- Attorneys examine Chime’s internal marketing documents
- Expert testimony on automated text systems
- Data analysis of referral campaign reach
Q4 2026-Q1 2027: Settlement negotiations likely begin
- Most CEMA cases settle before trial
- Settlement discussions typically occur after discovery reveals case strength
Realistic Timeline for Payment: If the case follows the Robinhood pattern (filed 2023, settled 2024), affected Washington residents could see settlement approval and payments by late 2026 or early 2027.
How to Protect Your Rights Now
If you believe you qualify for any Chime settlement:
For Text Message Claims
Save the evidence. Take screenshots of any referral texts you received, including:
- Date and time stamps
- Full message content
- Sender’s contact information
- Any follow-up messages
Don’t delete. Even if you’ve already deleted the texts, check if your phone carrier stores message logs.
File with investigators. Visit ClassAction.org’s Chime investigation page to submit your information to attorneys building the case.
For Delayed Refund Claims
No action required. The CFPB is automatically distributing refunds to eligible consumers based on Chime’s records.
Check your mail. Refund checks are being sent to the last known address on file.
Contact CFPB. If you believe you’re eligible but haven’t received payment, call (855) 411-CFPB (2372).
For California Customer Service Issues
File a complaint. California residents who experienced complaint handling failures during 2020-2021 should file complaints with the DFPI at dfpi.ca.gov.
Similar Fintech Lawsuits: A Growing Trend
The Chime cases represent a broader regulatory reckoning for fintech companies:
Robinhood ($9 million, 2024): Refer-a-friend CEMA violations
Cash App ($12.5 million, 2025): “Invite Friends” CEMA violations
Block Inc. (Cash App parent): Multiple regulatory actions
The pattern is clear: consumer protection laws apply to digital banking just as strictly as traditional banks—and regulators are watching.
What This Means for Fintech Users
These lawsuits reveal uncomfortable truths about “free” digital banking:
Hidden costs emerge. While Chime advertises no fees, regulatory penalties and settlements suggest the true cost of “free” services.
Terms change suddenly. Consumers report unexpected account closures and holds with limited recourse.
Customer service matters. When your money is locked, you need responsive support—not automated replies.
The Broader Implications
As fintech companies prepare for public offerings and seek mainstream acceptance, regulatory scrutiny intensifies. Chime’s 2025 IPO plans face headwinds from ongoing litigation.
For consumers, these cases establish important precedents:
- Referral programs must respect consent laws
- Companies can’t indefinitely hold your money
- Customer service quality is legally enforceable
Expert Legal Analysis
Consumer rights attorneys note several key takeaways:
“The CEMA cases show that aggressive growth tactics can backfire spectacularly,” explains one class action specialist. “A $100 referral bonus looks expensive when you’re paying $500 per illegal text.”
Regulatory experts emphasize the CFPB action’s significance: “This sends a message that fintech companies face the same accountability as traditional banks. Your money is your money, and delays violating promised timelines constitute unfair practices.”
FAQs About the Chime Lawsuit 2025
Q: Is there a Chime class action settlement I can join right now?
A: The Washington text message class action is still in litigation (not yet settled). However, the CFPB refund settlement is final and payments are being automatically distributed to eligible consumers who faced delayed refunds.
Q: How much money could I receive from the text message lawsuit?
A: Under Washington’s CEMA, each illegal text is worth $500. If you received multiple referral texts, you could be owed $500 per message. However, the actual amount depends on the final settlement terms and the number of class members.
Q: Do I need a lawyer to participate?
A: No. Class action lawsuits allow consumers to participate without hiring individual attorneys. If the text message case is certified as a class action and reaches settlement, you’ll receive notice with instructions for filing a claim. For the CFPB refund settlement, no action is required—payments are automatic.
Q: What if I deleted the text messages?
A: You may still qualify. Attorneys are working with phone carriers to obtain message logs. Document what you remember about the texts, including approximate dates and content.
Q: Can Chime close my account if I join the lawsuit?
A: No. Federal and state laws prohibit retaliation against consumers who participate in legal proceedings. Closing an account in retaliation would expose Chime to additional legal liability.
Q: How long until I receive settlement money?
A: Based on similar cases, the text message lawsuit could settle within 18-36 months of filing (July 2025). This means potential payments in late 2026 or 2027. CFPB refund payments are already being distributed.
Q: What’s the deadline to join?
A: There’s no deadline to join at this stage. Once the court certifies a class and approves a settlement, class members will receive notice with specific deadlines for filing claims—typically 60-90 days.
Q: Are Chime and Cash App the same company?
A: No. Chime Financial Inc. and Cash App (owned by Block Inc.) are separate companies facing separate lawsuits for similar violations.
Q: What if I live outside Washington state?
A: The text message class action is currently limited to Washington residents because it’s based on Washington’s CEMA. However, if similar referral program violations occurred in other states with comparable laws, additional lawsuits could be filed.
Q: Has Chime admitted wrongdoing?
A: In the CFPB refund case, Chime settled without admitting or denying the allegations (standard in regulatory settlements). The text message lawsuit is still being litigated, so no admissions have been made. In the California DFPI case, Chime entered a consent order acknowledging the need for improved practices.
What Should You Do Right Now?
If you received Chime referral texts in Washington:
- Take screenshots or document what you remember
- Visit ClassAction.org’s Chime investigation page
- Submit your information to help build the case
- Save all evidence in a secure location
If you faced delayed refunds on a closed Chime account:
- Monitor your mail for CFPB refund checks
- Contact CFPB at (855) 411-CFPB if you believe you’re eligible but haven’t received payment
- Keep records of when your account closed and the balance
If you’re a current Chime customer concerned about these issues:
- Document all account activity and communications
- Save evidence of any problems immediately
- File complaints with appropriate regulators if you experience issues
- Consider alternative banking options if these patterns concern you
Looking Ahead: Fintech Accountability in 2026
The Chime lawsuits represent a turning point for digital banking accountability. As traditional banks face strict regulations, fintech companies are learning they’re not exempt from consumer protection laws.
The 2026 developments will likely include:
- Court rulings on Chime’s dismissal motion
- Potential discovery revelations about referral program scope
- Settlement negotiations if the case proceeds
- Additional regulatory scrutiny of fintech growth tactics
- Possible copycat lawsuits in other jurisdictions
For consumers, these cases provide a roadmap: document problems, know your rights, and hold companies accountable when they violate the law.
The Bottom Line
The Chime lawsuit 2025 isn’t just about text messages or delayed refunds—it’s about whether fintech companies will respect the same consumer protections that govern traditional banking.
Washington residents who received unsolicited referral texts could be owed $500 per message. Consumers who waited months for refunds on closed accounts are receiving automatic payments. And California’s enforcement action shows that customer service quality is legally enforceable.
As we head into 2026, one thing is clear: your rights matter, your money is yours, and companies that violate consumer protection laws will pay—sometimes literally millions of dollars.
Stay informed. Save your evidence. Know your rights.
Disclaimer: This article provides information about ongoing legal matters and does not constitute legal advice. Class action settlements are subject to court approval, and actual payments may differ from estimates. For case-specific guidance, consult with a licensed attorney. AllAboutLawyer.com is a legal information resource and is not involved in these lawsuits or settlements.
Sources:
- Consumer Financial Protection Bureau – CFPB Takes Action Against Chime Financial
- California DFPI – DFPI Orders Chime Financial to Pay $2.5 Million
- Top Class Actions – Chime class action claims company sent unsolicited ‘refer a friend’ texts
- ClassAction.org – Chime Class Action Lawsuit Investigation
- Law360 – Chime Facing Class Suit In Wash. Over ‘Refer-A-Friend’ Texts
- Justia – Charles v. Chime Financial Inc Case No. 2:25-cv-01361
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
Read more about Sarah