FTC sues Uber claiming deceptive charges without rider consent

SAN FRANCISCO (CN) — The Federal Trade Commission (FTC) filed a lawsuit on Monday against Uber, accusing the ride-share giant of enrolling users in its Uber One subscription service without consent, failing to honor promised savings and creating a labyrinthine cancellation process in violation of federal consumer protection laws.

In the complaint, filed in the U.S. District Court for the Northern District of California, the FTC claims Uber misled consumers with false promises of monthly savings, billed them prematurely and forced them to navigate as many as 23 screens and take 32 steps to cancel the $9.99-per-month membership.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” FTC Chairman Andrew N. Ferguson said in a statement announcing the lawsuit. “The Trump-Vance FTC is fighting back on behalf of the American people. Today, we’re alleging that Uber not only deceived consumers about their subscriptions, but also made it unreasonably difficult for customers to cancel.”

Uber One, which offers perks like discounted rides and free delivery on orders, was advertised as saving users “$25 a month.” But the FTC says that figure is misleading because it fails to factor in the cost of the subscription itself. It also accuses the company of burying key information in small, greyed-out text and enrolling some users without their consent — including one consumer who claimed they were charged despite not having an Uber account.

The agency also claims Uber charged some customers before their free trials had ended, despite assurances that they could cancel before being billed. In some cases, users trying to end their membership were required to explain why, offered incentives to stay or told to contact customer support — without being given a way to do so.

“In numerous instances, even when consumers are able to reach Uber’s customer service, the representatives take so long to respond to and effectuate consumers’ cancellation requests that consumers end up being charged again without their consent,” the FTC said in its complaint.

Additionally, the FTC claims that some Uber customers are automatically enrolled into Uber One through Uber’s partnership with certain credit card companies. Those consumers with certain credit cards may be signed up for Uber One free trials without their notice and then charged when the free trial expires.

“Consumers report finding Uber One charges on their credit card bill despite never knowingly signing up for an Uber One subscription at all. For example, one consumer said, ‘Uber is charging me for Uber One and I did not sign up nor gave them credit card info,’ while another consumer related that, ‘Uber One has been charging my bank account for $9.99 a month without my consent or me subscribing,’” the FTC said in its complaint.

The FTC argues that Uber’s conduct violates both the Federal Trade Commission Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which mandates that companies clearly disclose subscription terms, get informed consent before charging and make cancellations easy.

The FTC voted 2-0-1 to authorize the lawsuit, with Commissioner Mark R. Meador recused.

Stephanie Liebner, James Doty, and Paul Mezan of the agency’s Bureau of Consumer Protection are the lead attorneys handling the case for the FTC. The case has not yet been assigned to a judge.

Uber did not immediately respond to a request for comment on the lawsuit.