FTC Sues Uber Over ‘Deceptive’ Subscription Practices

The US Federal Trade Commission has sued ride-hailing company Uber, alleging the company employed deceptive billing practices with its Uber One subscription programme and made it too difficult for users to cancel, in spite of marketing the scheme with a “cancel anytime” policy.

The FTC also said Uber charged customers for Uber One without their consent and gave false information about the discounts it offers.

“Americans are tired of getting signed up for unwanted subscriptions that seem impossible to cancel,” said FTC chair Andrew Ferguson.

Deceptive claims

The action is one of the agency’s first major actions against a large tech firm under Ferguson, a Donald Trump appointee, indicating that the trade regulator intends to take a firm stance under the new administration.

The FTC said that although Uber advertised savings of $25 (£19) per month, the company did not include the subscription cost of $9.99 per month in those calculations.

The agency gave examples of users who said they signed up for a free trial of the service, but were automatically charged before the trial period had ended.

When they tried to cancel, the FTC said users were forced to click through 23 screens and take 32 actions.

Some users were told to contact customer support but were not given a way to contact them, while others said Uber continued to bill them for another cycle after they requested cancellation and were waiting to hear back from customer support, the FTC said.

Uber said the complaint was based on “misunderstandings” and called the FTC’s probe “rushed”.

‘Clear, simple’

“We are disappointed that the FTC chose to move forward with this action, but 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,” the company said.

It said it does not sign up or charge consumers without their consent and that cancellations can be done at any time within the app and for “most people” can be completed quickly.

The suit was filed in the US District Court for the Northern District of California and charges Uber with violating the FTC Act and the Restore Online Shoppers’ Confidence Act.

Last June the FTC filed a similar lawsuit against Photoshop and Acrobat maker Adobe, alleging the company concealed high termination fees from customers of its most popular subscription plan and used an array of tactics to make it intentionally difficult for users to cancel.

In that lawsuit the FTC said Adobe steered customers toward its “annual paid monthly” subscription option without clearly disclosing cancellation fees that could rise into the hundreds of dollars.