The Federal Trade Commission on Thursday filed a lawsuit against Seattle-based bill payment company Doxo and members of Doxo's senior leadership team.
The lawsuit alleges Doxo, which provides a central place for consumers to pay bills, intercepted consumers who would search for ways to pay billers online. According to the FTC, Doxo would upcharge these consumers for using Doxo's service, when consumers could often just pay the biller directly without the added charges from Doxo.
"Using 'dark patterns' — design tricks that manipulate consumers into taking unwanted actions — Doxo dupes consumers into using its service by disguising itself as their billers’ official payment channel," read the complaint, filed in the U.S. District Court for the Western District of Washington. "Doxo places its ads so that they will be seen by consumers searching for their billers, styles its ads and weblink headlines so that they appear as the billers’ official payment sites, and arranges the subsequent payment flow to reinforce the misimpression. In many cases, and for thousands of billers, Doxo’s payment links appear at or near the top of consumers’ bill pay searches only because Doxo spends millions in advertising to place them there."
According to the suit, less than 2% of billers in Doxo's network have authorized the company to receive payments on the billers' behalf.
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The lawsuit also names Steve Shivers, Doxo's co-founder and CEO, and Roger Parks, co-founder and vice president of business development at Doxo, as co-defendants. The FTC also alleges that, in some instances, Doxo didn't pay billers after consumers had submitted a payment, resulting in late fees, missed payments or double payments.
Another issue in the lawsuit is Doxo's subscription service, DoxoPlus. Until February of this year, at the end of the bill pay process, the suit alleges consumers came across an unchecked box that would enroll them in DoxoPlus, but when consumers clicked on the "User Terms of Service" hyperlink, the DoxoPlus subscription box also got checked, enrolling consumers in the service if they didn't notice. According to the lawsuit, an internal 2022 survey showed about 40% of Doxo consumers charged for the subscription service were not aware they had an account.
The FTC alleges "tens of thousands" of people have complained about Doxo, and hundreds of billers have complained about Doxo's tactics.
In a statement, Shivers called the lawsuit a "misguided action by the FTC."
"We provide a great consumer experience, evidenced by our high repeat usage rates, strong reviews, and excellent customer satisfaction scores. We look forward to fighting this battle on behalf of consumers and billers," Shivers said in the statement.
Doxo was founded in 2008. According to the company, it has more than 10 million users and more than 120,000 billers on its network. The company raised an $18.5 million Series C round in 2022.
