Dive Brief:
- Doxo has agreed to pay a $2.1 million penalty to the Federal Trade Commission to settle a case in which the government alleged the online bill payment company misled consumers with its advertising.
- Under the proposed settlement, the money will go toward compensating victims of Doxo’s allegedly deceptive ads, the agency said in a press release on Monday. The FTC also barred Doxo from charging consumers without their consent; misrepresenting its relationship with billers; and misleading customers about the price they will pay, according to the release.
- As part of the settlement, the company can no longer misrepresent itself to obtain consumers’ information, and it is required to make clear to customers of the deadline by which they must take action to stop being charged for goods and services, per the release.
Dive Insight:
The FTC took action against Doxo in April 2024 over its deceptive advertising. In its release Monday, the agency said the Commission approved the final order in a 2-0 vote. An FTC spokesperson did not immediately respond to a message Tuesday on when the commission voted.
In its 2024 complaint, the FTC alleged that Doxo and two of its co-founders, Steve Shivers and Roger Parks, posted search ads and other promotions to mislead consumers into using the company’s platform for their utility, car loans and other bill payments. In those ads, the company misrepresented itself as the official payment channel for those bills, the agency said.
Under the settlement, the Bellevue, Washington-based company did not admit or deny the FTC allegations. In a statement, a Doxo spokesperson said that “many of the rules governing online payments were written in a different era.”
“Doxo is very pleased to announce it has reached resolution with the Federal Trade Commission,” the statement said. “The company will continue working cooperatively with the FTC, and its full focus remains on the households and billers that rely on its platform every day.”
The stipulated agreement for a permanent injunction and damages was filed in the U.S. District Court in Seattle.
In May, ruling on the agency’s motion for summary judgment, U.S. District Judge Thomas Zilly found that Doxo violated the Restore Online Shoppers’ Confidence Act, because it failed to clearly state subscription terms and did not gain consumers’ consent to subscription charges, per the release.
The complaint also alleged that Doxo’s landing page contained other companies’ logos, but the company was not in partnerships with those businesses.
The FTC also alleged Doxo charged bill payers additional “delivery fees” that weren’t clearly disclosed and signed them up for its recurring subscription program.
“Misleading search text ads thwart consumers’ pursuit of information and undermine the integrity of the marketplace,” the director of the FTC’s Bureau of Consumer Protection, Christopher Mufarrige, said in a release. The settlement “underscores the FTC’s commitment to stopping deceptive search text ads so that consumers can connect confidently with legitimate businesses, avoid hidden fees and make informed decisions.”
