FTC Alleges Bill Payment Firm Doxo Bilked 'Millions' in Junk Fees From Consumers

Despite advertising that consumers can “pay any bill” using its “purportedly vast payment ‘network of billers,’” third-party bill payment platform Doxo “has no relationship with the overwhelming majority of billers in its supposed ‘network,'” the FTC alleged in a Thursday complaint (docket 2:24-cv-00569) in U.S. District Court for Western Washington in Seattle. The lawsuit names Doxo, CEO Steve Shivers and Vice President Roger Parks.

“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, in a news release. The company buys search engine ads that appear when consumers look online for information about companies they owe money, the FTC said. The ads “mislead consumers into believing that Doxo is affiliated with those companies,” it said.

Doxo uses design “tricks” the FTC calls "dark patterns" that manipulate consumers to take unwanted action, the complaint said. The “dark patterns” dupe consumers into using Doxo, it said. When consumers click on Doxo’s ad and proceed to payment, they encounter “words and images, including the biller’s name, contact information, and sometimes even its logo, that reinforce the misimpression that they have reached their biller’s official payment site,” the complaint said. At the last stage of the payment process, the company adds “junk fees to consumers’ bills that in the bulk of cases they could avoid if they paid their biller directly,” it said.

As a result, consumers have paid “millions of dollars in junk fees,” and experienced additional harm, the complaint alleged. Consumers have spent “hours trying to track down payments made to Doxo,” have missed “tax, child support, and utility payments," have had medical and other bills sent to collection, "and have had their gas, water, and electricity cut off,” because the company “falsely represented that their payments were made ‘directly’ to their billers,” the complaint said.

Doxo also harmed consumers by enrolling them in paid subscriptions when they simply clicked on a terms of service hyperlink, the complaint said. Until earlier this year, the company “without warning checked a box that automatically enrolled [consumers] in a paid subscription,” it said. It halted this practice after receiving a copy of the FTC’s draft complaint, it said. But even now, Doxo “shrouds from consumers critical terms of the subscription,” the complaint alleged. The company charges recurring fees for the subscription, “while also continuing to charge many subscribers junk fees -- a fact Doxo never discloses.” The defendant “has known for years that it is systematically charging consumers for unwanted subscriptions but has refused to reform the enrollment process to preserve subscription revenue," alleged the complaint.

Doxo continued its “deceptive conduct” despite complaints from “tens of thousands of consumers,” and after “hundreds of billers have warned their customers about Doxo’s deceptive conduct,” the complaint said. Defendants Shivers and Parks, who are among the company's co-founders, “have been repeatedly alerted by multiple sources that the company is deceiving consumers,” the complaint alleged. It quoted a search engine employee who said: “They know exactly what they are doing.”

The complaint alleges Doxo violated the FTC Act, the Restore Online Shoppers’ Confidence Act and the Gramm-Leach-Bliley Act. The commission seeks a permanent injunction to prevent future statutory violations, monetary relief and other relief the court determines to be “just and proper,” it said. The defendants didn't comment.