Doxo asked a federal judge to dismiss the U.S. Federal Trade Commission’s lawsuit against the Seattle-based bill payment company, denying wrongdoing and saying it nonetheless resolved the issues raised by the FTC before the suit was filed.
The FTC’s suit, filed in April in U.S. District Court in Seattle, alleges that Doxo used deceptive ads and misleading web design techniques to make people believe they were paying billers directly, instead saddling them with unwanted fees and tricking them into signing up for its service.
Doxo’s June 24 motion to dismiss the case disputes each of the FTC’s claims, and cites the company’s track record of more than 15 years in business.
“The FTC’s Complaint paints a misleading picture of Doxo as a fly-by-night scam that hurts consumers, when in fact it has a substantial and loyal customer following, has a long-standing and successful business that adds value, and is decidedly pro-consumer,” the motion says. “The reality is that this case centers on a disagreement about font size and has nothing to do with a scam.”
As one part of its April 25 complaint, the FTC alleged that disclosures by Doxo about the nature of its service were difficult to see and easy to overlook — presented on its website in “light gray text, the smallest text on the page, under the large green button reading, ‘PAY BILL.’ “
In its motion to dismiss the case, the company says the FTC’s suit failed to acknowledge other features of Doxo’s site that identify the company and clearly explain its service.
The company’s motion also cites the prior dismissal of a separate suit against Doxo in the same court from two debt collection agencies that alleged it was falsely portraying itself as representing them. A magistrate judge in that case agreed with Doxo’s defense in a report that was ultimately adopted by the federal court judge.
“The disclaimers appear numerous times and alongside other items – list of overlapping billers, payment location map, distinctive Doxo word mark, logo, and banners, and colors – all of which suggest that it is not plausible that any reasonable consumer accustomed to navigating the internet would be confused,” U.S. Magistrate Judge Brian Tsuchida wrote in that case.
Doxo, founded in 2008 and backed by investors including Jeff Bezos, has more than 95 employees, according to its motion. The motion cites the value of the company’s service, saying that more than 70% of its transactions come from repeat customers.
In addition to providing a centralized bill payment hub, the company offers services such as identity theft protection, credit score monitoring, overdraft fee reimbursement, and late fee reimbursement
The motion says Doxo’s business is experiencing “incalculable harm” due to the FTC’s complaint and accompanying press releases, including one that cautioned consumers to “Pay your bills, not impersonators.”
“Before filing, Doxo participated in a year-long investigative process through which it provided the FTC with voluminous internal documentation,” it says. “Though Doxo did not violate any laws, it agreed to changes in the spirit of being a responsible corporate citizen. The FTC, however, was uninterested in voluntary compliance.”
The company acknowledged in the motion that the FTC, as part of its investigation, “identified a glitch in Doxo’s website whereby customers could inadvertently check the opt-in box for a subscription when clicking a link to review the subscription terms of service.”
Doxo says it fixed this issue as soon as it learned about it, and contacted more than 1,500 customers who were potentially impacted, to offer full refunds.
The motion says all of the changes and fixes made by Doxo rendered the FTC’s allegations moot before the case was filed. If the court doesn’t dismiss the case, Doxo asks for an expedited trial to “to remove this cloud over its business.”
In addition to the company, the FTC’s suit names as defendants two of Doxo’s co-founders: Steve Shivers, CEO; and Roger Parks, VP of business development. Doxo’s motion specifically says that the FTC failed to state a claim against Parks, and asks for him to be dismissed as a defendant.
In April, the FTC said in a news release that Shivers and Parks “have known from years of internal surveys and complaints from tens of thousands of consumers and hundreds of billers of the harms their business model caused consumers and have still failed to correct their unlawful actions.”
Doxo raised $18.5 million in funding in 2022, its first capital infusion since 2011, saying at the time that it was profitable with annual revenue of more than $40 million. Investors in the company include Jackson Square Ventures, MDV, and Sigma Partners, in addition to Bezos Expeditions, the Amazon founder’s investment firm.
Contacted by GeekWire on Wednesday afternoon, an FTC spokesperson said the agency had no comment on the company’s motion to dismiss the case.
Read Doxo’s full motion below.
Doxo Response to FTC by GeekWire on Scribd
https://ift.tt/2V1oUhs June 27, 2024 at 01:32PM GeekWire
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