Photo credit: www.theverge.com

FTC Files Lawsuit Against Uber Over Subscription Enrollment Practices

The Federal Trade Commission (FTC) has initiated legal action against Uber Technologies, alleging that the ride-hailing giant improperly enrolled users in its subscription service and subsequently charged them without adequate consent. The FTC’s lawsuit seeks a permanent injunction to prevent Uber from continuing these enrollment practices, along with unspecified financial compensation for those affected.

FTC Chairman Andrew Ferguson articulated the agency’s stance, stating, “Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel. 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.” In a recent statement, he emphasized the importance of consumer protection in the digital age.

The FTC’s report indicates that Uber employed misleading language and difficult-to-read text aimed at attracting consumers into its subscription model. Customers were allegedly lured with claims of monthly savings, only to find that subscribing to the service incurred a fee of $9.99, which offset any purported savings. Additionally, the FTC noted that crucial information regarding the subscription was often obscured using small, greyed-out fonts, making it easier for consumers to overlook key details.

Many consumers reported to the FTC that they had been signed up for the service without their explicit consent. One notable case involved a customer who claimed they were charged despite not holding an Uber account. The FTC highlighted concerns that Uber frequently processed charges prior to the stated billing dates, occasionally initiating charges even before the conclusion of a free trial period. When users attempted to cancel their subscriptions, the agency noted that they met significant obstacles, describing the process as “extremely difficult.”

Testimonies from users indicated a lack of effective communication channels for cancellations. The FTC observed that some customers were told they had to reach out to customer support to terminate their subscriptions but were not provided with accessible means to do so. Others claimed they were billed for another cycle after requesting cancellation while awaiting a response from support services.

In response to the allegations, Uber has refuted the claims, asserting that the subscription cancellation process is straightforward and user-friendly. An Uber spokesperson, Noah Edwardsen, expressed disappointment over the FTC’s decision to pursue the lawsuit, remarking, “We are confident that the courts will agree with what we already know: Uber One’s sign-up and cancellation processes are clear, simple, and follow the letter and spirit of the law. Uber does not sign up or charge consumers without their consent, and cancellations can now be done anytime in-app and take most people 20 seconds or less.”

The company also provided statements from former FTC officials who expressed similar views regarding the action taken against Uber. Tim Muris, a former FTC Chair and current senior counsel at Sidley, criticized the FTC for proceeding without a thorough investigation, labeling it as a misunderstanding of the pertinent facts and legal framework.

Source
www.theverge.com