By James Pollard, Associated Press
NEW YORK (AP) – YouTube megastar Mr. Beast’s ambitious reality show, which he hopes will expand his huge online reach and redirect recent controversy, is already tied to fintech companies. Consumer advocates are raising questions about the partnership.
Prime Video’s Thursday premiere of the record-setting “Beast Game” capped off a turbulent year for Jimmy Donaldson and his production company. Shortly after reaching unprecedented subscriber numbers on YouTube, MrBeast spoke out about past “inappropriate content,” the channel’s philanthropy, workplace culture, and allegations of unsafe on-set conditions, which Donaldson denied. It has come under intense scrutiny.
Loyal fans of MrBeast watch as 1,000 contestants compete for $5 million in “Beast Games.” They will be asked to scan a QR code during the show for a chance to win money that will change their lives. It’s a $4.2 million sweepstakes run by fintech company MoneyLion, an app that sends cash to workers living paycheck to paycheck, often for a fee.
The collaboration is being touted as a way for MrBeast, who has been trying to regain trust in the brand with recent interviews with alternative media personalities, to give back to his fanbase while offering them MoneyLion’s personal finance tools. But consumer advocates say MoneyLion’s early payments (also promoted to giveaway participants) act as payday loans, trapping needy users in a borrowing cycle that drains their revenue with additional fees. It warns that this is a possibility.
Watchdog groups have deemed these services not recommended for younger viewers, making Mr.Beast an unusual partner to introduce to a persuasive fan base.
“These kinds of expensive fintech payday loans wrapped in flashy apps can put people into a debt trap where they have to borrow this week’s paycheck to pay last week’s loan, setting them back on their financial goals. Just let them,” Lauren said. Mr. Sanders is the director of the National Consumer Law Center, which specializes in small loans.
“Beast Game” marked Donaldson’s entry into television entertainment. The North Carolina native has already gained attention online for his highly produced, fast-paced YouTube videos, which often feature absurd stunts and large sums of cash. “Beat Ronaldo and Win $1 Million” pits professional athletes and amateurs against each other in their respective sports.
He’s now testing the widespread appeal of such viral spectacles with a competition series that promises “rigorous physical, mental and social challenges” similar to Netflix’s fictional survival drama “The Squid Game.” The $5 million prize money is believed to be the largest in reality show history, with Donaldson recently posting that he alone spent $14 million to “build cities in the fields” for his contestants.
According to a MoneyLion press release, the partnership with MoneyLion will bring “fans closer to the action than ever before.” More than 1,000 prizes will be awarded to MoneyLion account holders through eight drawings over the next year. Additional entries can be earned by logging into the MoneyLion app daily, and users are promised exclusive behind-the-scenes content from the series. In accordance with sweepstakes law, entrants must be 18 years of age or older and a legal resident of the United States.
When you enter a giveaway, a pop-up will ask, “Would you like to know more ways to win money?” We invite you to borrow money through MoneyLion’s loan service. Consumer watchdog groups say cash advances can cost a lot of money, despite being billed as “interest-free” loans.
Instead of waiting the 2-5 days that MoneyLion estimates it will take to fund your external checking account, users can receive their Instacash advances “within minutes” with sliding “turbo” fees. must be paid. The company charges $8.99 for prepayments of up to $100.
That makes MoneyLion one of the “more expensive options in this market,” said Andrew Kushner, senior policy adviser at the Center for Responsible Lending. Given that these products are aimed at cash-strapped people who need money now, Kushner said most users will end up paying the fee.
Kushner said these apps are creating a “cycle of borrowing” as economically vulnerable users try to endure “very high loan costs relative to their size.” The Center for Responsible Lending found that users of these apps experienced a 56% increase in overdrafts on their checking accounts. According to a 2021 California Financial Protection Bureau report, borrowers using these “Earned Wage Access” services made 36 withdrawals per year.
A 2022 Consumer Financial Protection Bureau lawsuit alleges that MoneyLion misled users into believing they could easily terminate the monthly memberships required to access some installment loans, yet He claims that he refused to cancel the contract.
A representative for Mr.Beast declined to comment. In an emailed statement, a MoneyLion spokesperson said the company uses a combination of financial tools and products to support “long-term financial health and stability,” all of which are available through participation in the Beast Games Giveaway. He said that it would be advertised to the public. According to a spokesperson, MoneyLion “continues to collaborate with regulatory bodies,” including the CFPB, to ensure its products are “accessible, fair, and designed to deliver the best outcomes for customers.” He said he would focus on doing so.
The company’s Instacash fees are “clearly disclosed,” a spokesperson wrote, and the service helps workers “break the traditional payroll cycle” and “meet unexpected financial obligations.” It is said that it is useful for
“The Beast Games Giveaway is designed exclusively for audiences 18 and older and is an innovative way to combine engaging content with accessible financial education,” a spokesperson said. “Through this collaboration, participants will gain exposure to MoneyLion’s diverse marketplace of financial products, tools, and content.”
Sanders, the consumer protection lawyer, said the financial wellness tools offered by some lenders are really just “coating the surface” of high-cost loans.
Kushner said it’s a “concern” to promote such services to young people whose sense of financial responsibility is still developing and who are more susceptible to “the industry’s marketing sleight of hand.”
“As an 18-year-old, you can see how really exciting it is to have that in front of you,” Kushner said. “But once you use it, it can have real negative effects.”
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First published: December 19, 2024 10:45 AM PST
