FTC Sues Uber Over Alleged ‘Deceptive Billing and Cancellation’ Policies

The FTC said Uber failed to ‘clearly and conspicuously disclose’ all material terms to customers before obtaining their billing information.

The Uber logo at the Skirball Center in Los Angeles on May 8, 2018. Robyn Beck/AFP via Getty Images

The Federal Trade Commission (FTC) filed a lawsuit against rideshare company Uber, accusing it of misleading customers, the agency said in an April 21 statement.

The FTC alleged that the company “charged consumers for its Uber One subscription service without their consent, failed to deliver promised savings, and made it difficult for users to cancel the service despite its ‘cancel anytime’ promises.”

Uber’s “deceptive billing and cancellation practices” violate the FTC Act as well as the Restore Online Shoppers’ Confidence Act (ROSCA), the agency said.

ROSCA requires online retailers to clearly disclose service terms, secure customers’ consent before charging them for a service, and offer a simple way to cancel any recurring subscriptions.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” FTC Chairman Andrew N. Ferguson said. “The Trump-Vance FTC is fighting back on behalf of the American people.”

The lawsuit was filed at the U.S. District Court for the Northern District of California, San Francisco Division.

Uber dismissed the FTC allegations in an emailed statement to The Epoch Times.

A company spokesperson said Uber does not sign up or charge customers without obtaining consent and that subscriptions can be canceled anytime via the app, taking 20 seconds or less for most people.

The lawsuit charged Uber with a count of misrepresentation, alleging that the company “directly or indirectly, expressly or by implication,” indicated to customers that they could cancel subscriptions at any time without incurring any additional costs.

“Consumers cannot cancel at ‘any time’ without being charged additional fees,” the complaint alleged.

The Uber spokesperson said this process has been changed. In the earlier instance, customers who wanted to cancel within 48 hours of their next billing period were required to contact support to proceed with cancellation.

“This is no longer the case; consumers can now cancel in the app at any time, and we have refunded customers who had reached out to Uber Support to cancel within 48 hours of their next billing period,” the spokesperson said, adding that “consumers who canceled were never charged additional fees.”

The FTC said Uber failed to “clearly and conspicuously disclose” all material terms to customers before obtaining their billing information.

This includes disclosures such as enrollment in a recurring billing plan, the method of cancellation, when they will be billed and charged, and the amount of money users save by subscribing to the Uber One service.

The company spokesman said Uber’s sign-up for the One subscription “shows material disclosures on the same screen as the option to choose payment method, including that the consumer will be charged on a recurring basis to a payment method on file at Uber, and that they can cancel up to 48 hours in advance of their next billing date to avoid charges.”

Customer Complaints

The FTC gave multiple examples of Uber allegedly misleading customers.

For instance, when customers sign up for the One service, they are “wrongly promised” savings of $25 per month, it said. The company does not take into account the cost of a subscription, which can be up to $9.99 per month, when calculating savings, the FTC said.

Many customers said they were enrolled in the One service without consent, with one person saying they were charged even without having an Uber account, the FTC alleged.

Uber allegedly made it “extremely difficult” for customers to cancel subscriptions, forcing users to navigate up to 23 screens and take up to 32 actions to cancel.

The Uber spokesperson said the company was “disappointed that the FTC chose to move forward with this action” but believes that the courts will side with the company.

“Uber One’s sign-up and cancellation processes are clear, simple, and follow the letter and spirit of the law,” the spokesperson said.