The Federal Trade Commission is taking action against bill payment company Doxo and two of its co-founders, charging that the company uses misleading search ads to impersonate consumers’ billers and deceptive design practices to mislead consumers about millions of dollars in junk fees they tacked on to consumers’ bills.
The complaint alleges that Doxo, its CEO and co-founder Steve Shivers, and its vice president and co-founder Roger Parks, have known from years of internal surveys and complaints from tens of thousands of consumers and hundreds of billers of the harms their business model caused consumers and have still failed to correct their unlawful actions.
The FTC’s complaint notes that, even though Doxo immediately charges a consumer for payment, in many instances, the company then prints a paper check that is mailed to the biller – arriving days or sometimes weeks after the customer believes their bill is paid. As a result, many consumers have had their utilities shut off, have had car and health insurance lapse, and have been charged fees and fines even though they paid their bills on time.
“Doxo intercepted consumers trying to reach their billers and tricked them into paying millions of dollars in junk fees,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to take action when companies use deceptive design tricks to harm consumers.”
According to the FTC’s complaint, Doxo purchases search engine ads that appear when consumers search online for information about companies they owe bills to. These ads are created to mislead consumers into believing that Doxo is affiliated with those companies. The complaint cites as an example Doxo’s ads that are designed to trick consumers into believing they are affiliated with a prominent medical testing company. Doxo bought ads that appeared when consumers searched for the company’s name or website, and the ads included headlines that included the company’s name but not Doxo’s.
Doxo’s landing pages prominently feature the biller’s company name and sometimes even their logo, even though Doxo generally does not have a formal relationship with the biller. In fact, less than two percent of the companies in Doxo’s “network” authorize Doxo to accept payments on their behalf, according to the complaint.
Once consumers provide their billing details, Doxo then shows a final payment amount, onto which the company tacks an extra fee that is included only at the final payment step, and even then only in greyed-out fine print.
The complaint also outlines Doxo’s deceptive process to sign consumers up for its recurring subscription program, noting that, until February 2024, after learning of the FTC’s proposed complaint, the company would automatically check the box to sign consumers up when they clicked to read a terms of service document. In addition, while Doxo said consumers would save on the company’s “delivery” fees, consumers paying for the monthly plan are still often charged those fees.
Tens of thousands of consumers have complained about Doxo’s deceptive practices, according to the complaint, with many pointing to the fact that they paid more than their actual bill amount, even when the actual billers did not charge for online payments. The complaints were so numerous that, in 2021, employees of a major search engine declared Doxo’s ads to be “super misleading,” but the company still has not changed the fundamental structure of its ads. The complaint points to multiple instances in which the company’s top executives, Shivers and Parks, were personally made aware of complaints against Doxo.
The complaint alleges that Doxo violated the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Gramm-Leach-Bliley Act.
The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Western District of Washington.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
The staff attorneys on this matter are James Doty and Edward Smith of the FTC’s Bureau of Consumer Protection.