On September 17, the FTC announced a proposed settlement requiring a fuel card provider and its chief executive officer to pay $100 million to resolve an administrative action under Section 5 of the Federal Trade Commission Act concerning the company’s fee practices and marketing representations. The settlement follows federal court rulings holding the company liable for unfair and deceptive practices involving its fuel card products.
The FTC initially sued the company and its CEO in 2019, alleging that the company made deceptive representations and charged unauthorized fees in connection with fuel cards marketed primarily to small businesses. The FTC later brought an administrative action challenging the same practices after a 2021 Supreme Court decision limited the FTC’s ability to obtain monetary relief under Section 13(b) of the FTC Act. Specifically, the FTC alleged that the company:
- Misrepresented fuel savings. The company allegedly overstated the per-gallon savings customers could receive through its fuel cards.
- Misrepresented card restrictions. The FTC alleged that the company represented certain cards as restricted to fuel purchases even though cardholders could use them for other purchases at fueling locations.
- Charged unauthorized fees. The company allegedly imposed account, transaction, membership, and other fees without adequately disclosing them or obtaining customer authorization.
- Improperly assessed late fees. The FTC alleged that certain payment-processing practices resulted in customers being charged late fees despite making timely payments.
Under the proposed consent order, the company and its CEO must pay $100 million to the FTC for consumer redress and provide customer information necessary to administer refunds. The order also contains payment and compliance requirements and would remain in effect for 20 years.
Putting It Into Practice: The settlement follows FTC enforcement actions regarding consumer financial products and payment practices (previously discussed here and here). The action reflects the FTC’s continued focus on allegedly deceptive marketing, undisclosed fees, and unauthorized charges. Companies offering payment and commercial card products should review marketing claims, fee disclosures, and authorization procedures and update compliance practices as necessary.