The Federal Trade Commission (FTC) is taking legal action against doxo, a bill payment service, accusing it of deceiving consumers and imposing unnecessary fees. The FTC has filed a complaint in federal court alleging that doxo has violated several laws, including the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Gramm-Leach-Bliley Act, according to a press release issued on Thursday (April 25).
Samuel Levine, director of the FTC’s Bureau of Consumer Protection, stated in the press release, “Doxo intercepted consumers trying to reach their billers and tricked them into paying millions of dollars in junk fees. The FTC will continue to take action when companies use deceptive design tricks to harm consumers.”
In response, a spokesperson for doxo countered the FTC’s claims, asserting that the investigation misrepresents the company’s role and could undermine efforts to simplify and reduce the costs of bill paying. The spokesperson emphasized, “The U.S. Federal Trade Commission’s complaint indicates a fundamental misunderstanding of the existing bill-pay market and the structural inefficiencies that almost always work against consumers. Doxo is committed to fighting on behalf of all consumers and billers who deserve a better bill pay experience, and we look forward to seeing their interests prevail.”
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According to the FTC, doxo engages in misleading advertising by purchasing search engine ads that suggest affiliation with billers when consumers search for those companies. The agency’s complaint also accuses doxo of only revealing additional fees at the final step of the payment process in fine print that is difficult to read, and employing deceptive methods to enroll consumers in its recurring subscription program. The complaint further alleges that doxo charges “delivery fees” despite claims that subscribing would save on such costs.
Doxo defended its practices in a statement: “For over 14 years, doxo has remained committed to taking the necessary steps to comply with all regulations and exceed market standards for ensuring consumers are protected and empowered throughout the bill pay experience. To date, we have assisted over 10 million people in safely and efficiently paying their bills, eliminating extraneous costs, and improving and protecting their financial health.”
The FTC has also proposed a rule to eliminate junk fees. This rule would prohibit businesses from charging hidden and misleading fees and would require them to disclose the full price upfront. Additionally, the agency is focusing on combating “dark patterns,” deceptive design practices that manipulate or mislead consumers into making unintended decisions, such as incurring unauthorized charges or divulging personal information. More information on this can be found on the FTC’s official site.