Is Empower App Legit? Consumer Reports [Updated]

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  • Post published:February 8, 2024
  • Post category:Reviews

In today’s financial landscape, cash advances and payday loans have become controversial topics. While they aim to help those in need of short-term cash, critics argue they often trap borrowers in cycles of debt.

The Empower app promises a new type of cash advance alternative designed to be more affordable and transparent. But is Empower truly different than traditional payday lenders, or is it just another predatory option? In this in-depth review, we’ll take a close look at how Empower works, examine its features and fees, analyze customer reviews, and assess whether the Empower app is legit or not.

By the end, readers should have a clear understanding of whether Empower represents a legitimate financial solution or if caution is still warranted. Let’s get started!

Is Empower App Legit? How Does the Empower App Work

The Empower app provides instant cash advances of up to $250 to users who connect a bank account. Here are the key things to know about how it works:

  • No credit check – Empower does not perform a hard credit pull, so your credit score is not affected by applying.
  • Instant funding – Once approved, the cash advance is deposited directly into your bank account, often within minutes.
  • Repayment options – You can choose to repay the full amount with your next paycheck or set up customized payment plans. There are no late fees.
  • Fees – Empower charges a flat $3 fee for any cash advance under $50. Advances $50-$250 incur a 7.5% fee.
  • Eligibility – To qualify, you need an active bank account, steady income, and to be 18+. Empower verifies identity and income electronically.

So in summary – Empower provides quick access to small sums of cash but bills itself as “not a loan” since repayment terms are flexible. Let’s analyze whether this model delivers on its promises of being affordable and transparent.

Are Empower’s Fees Actually Affordable?

At first glance, Empower’s fee structure may seem reasonable compared to traditional payday loans, which often charge 400%+ annualized interest rates. However, critics argue the company is still exploiting vulnerable customers through deceptive marketing.

To assess Empower’s true costs, it helps to calculate fees in annual percentage rate (APR) terms used for loans. Here are some examples:

  • $50 advance with $3 fee = 60% APR
  • $100 advance with 7.5% ($7.50) fee = 156% APR
  • $250 advance with 7.5% ($18.75) fee = 121% APR
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While lower than payday loans, these APRs are still significantly higher than most credit cards. And repeat users may end up paying even more in compounding fees over time.

Importantly, Empower’s flexible repayment terms can actually increase costs for customers compared to traditional loans. By slowly repaying over multiple pay periods rather than a single lump sum, more fees are incurred.

So in summary – while not as extreme as payday lenders, Empower’s cash advances still carry triple-digit effective interest rates. Their marketing spin of labeling it a “non-loan” obscures the true cost to financially vulnerable customers.

Are Empower Transactions Actually Transparent?

Another central claim of Empower’s business model is transparency around transactions. But do their practices truly deliver transparency? Let’s examine:

  • Lack of full disclosure – Nowhere in the app or marketing materials is the true APR cost prominently disclosed, instead opting for obtuse fee percentages.
  • Confusing opt-outs – Canceling the recurring monthly membership requires clicking through several screens, instead of a clear “cancel subscription” button.
  • Ambiguous terms – Key details like exact repayment due dates are decided after funding, not clearly explained upfront. Contracts rely on legal jargon.
  • Opacity around defaults – What exactly happens if a payment is missed? Are there unspecified penalties, damage to credit reports, or debt collection?
  • UX dark patterns – Subtle design tricks like “Remind Me Later” buttons risk trapping users in recurring payment cycles out of carelessness.

While not outright fraudulent, Empower’s disclosures lack the crystal clear transparency required when providing high-cost loans. Their “non-loan” framing may technically comply with regulations but misleads users on the true costs and risks involved.

In summary – Empower stops short of being fully transparent, leaving much open to ambiguous interpretation that disproportionately benefits the company over the consumer. True transparency requires clear, prominent disclosure of all monetary and non-monetary risks upfront.

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What Do Customer Reviews Reveal?

To get a sense for real customer experiences, it’s important to analyze online reviews of Empower. On platforms like Trustpilot and the Apple App Store, Empower has averaged around 4-star ratings. But digging deeper, some consistent critiques emerge:

Positive reviews tend to focus on instant funding and flexible repayment terms helping in emergencies. However, many 1-star reviews cite:

  • Confusion over hidden fees – Repeated users were surprised by compounding costs of long repayment plans.
  • Difficulty canceling – Attempts to exit recurring subscriptions resulted in account holds or excessive clicks to unsubscribe.
  • Lack of customer support – Calls and messages went unanswered for days during disputes or account issues.
  • Failure to block repeated borrowing – No controls to prevent using new advances to pay off previous balances, resulting in cycles of debt.

Overall, the reviews suggest Empower delivers initial promises but drops the ball on ongoing customer experience. Problems tend to arise from lack of transparency on costs or unresponsive service – hallmarks of predatory lenders.

In summary, while some customers find value in addressing short-term needs, reviews indicate Empower’s practices eventually lead many into unaffordable debt cycles typical of predatory lenders – contradicting their branding as a responsible alternative.

Is Empower Regulated Like Other Lenders?

Ideally, companies providing loans and lines of credit would be regulated similarly to protect consumers. So how does Empower compare?

  • State licensing – Empower is licensed in some but not all states like traditional lenders, avoiding full oversight in license-optional states.
  • Interest rate caps – Most states cap loan APRs, but Empower argues inflated APRs don’t apply since it’s “not a loan.”
  • Cool-off periods – Predatory regulations require refund periods before loans are binding, but Empower’s instant funding bypasses these.
  • Credit reporting – Empower doesn’t currently report payment histories to credit bureaus, but may do so in future through partner lender.
  • Debt collection – Practices like wage garnishment or filing lawsuits are shielded by their banking partnerships rather than Empower directly.

So while Empower complies with some regulations, they structurally position their product outside of full oversight, raising questions as to whether they are truly different than predatory fringe lenders in practice, if not by legal definition.

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In summary, by operating through technicalities and partnerships, Empower engages in rent-seeking to skirt true regulatory parity and consumer safeguards required of traditional financial institutions. Such approaches open the door for unethical practices proven to harm vulnerable communities.

Empower App Review Conclusion – Is it Legit?

After examining how Empower operates, its fee structures, customer reviews, level of transparency, and approach to regulation, it’s clear their model poses many of the same risks as predatory payday lending. While the company markets itself as a responsible alternative, the reality is more complex.


  • High costs and compounding fees make repayments unaffordable for many, despite flexible terms.
  • Lack of transparent, prominent disclosures obscures true monetary and nonmonetary risks to exploit consumers.
  • Customer reviews highlight issues with debt traps, unresponsive service, and an experience prioritizing company profits over consumer well-being.
  • Regulatory arbitrage positions Empower outside of full oversight and consumer safeguards – a hallmark of predatory fringe lenders.

The evidence suggests Empower’s cash advances more accurately represent high-interest installment loans rather than any legitimate form of non-debt financing. While startups deserve latitude to innovate, Experimenting with people’s financial lives requires an extremely high bar of transparency, consumer protection and equitable treatment – a standard Empower falls short of meeting based on present practices.

In summary, despite marketing spin attempting to position it differently, our comprehensive review finds the Empower cash advance model to ultimately carry many of the same risks as predatory payday lending.

Consumers would be best served exercising caution or avoiding the Empower app altogether until more responsible reforms are made. High-cost financing should always be an absolute last resort. What are your thoughts on Empower after reading this in-depth review? Let me know in the comments below.

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