If you’re paying a medical, utility, or other bill online, you probably expect to wind up on the company’s website.
What might you not expect? An impersonator tricking you into paying them instead. But that’s what the FTC says a company called Doxo did. Here’s what you need to know.
— This article by Andrew Rayo, a consumer education specialist with the Federal Trade Commission, appeareed in the FTC website on April 29.
According to the FTC, Doxo pretended to be an official payment site for big-name companies like AT&T, Spectrum, and Labcorp. The FTC says Doxo used online ads that looked like they were from the companies, and even used company names as keywords so Doxo’s ads would show up in search results.
Image from the FTC website
“People who paid their bills through Doxo often paid fees to Doxo on top of what they owed on the bill they were trying to pay. And, in some cases, the payment never got to the company that issued the bill. People only found out when they got a warning letter from a bill collector or had their utility service shut off.”
If the bills got paid, what’s the problem? There’s lots of them, says the FTC. People who paid their bills through Doxo often paid fees to Doxo on top of what they owed on the bill they were trying to pay.
And, in some cases, the payment never got to the company that issued the bill. People only found out when they got a warning letter from a bill collector or had their utility service shut off. Some people wound up paying late fees to the actual company that billed them — or paid their bill a second time, just to avoid other problems.
How to Avoid this Scam
If you’re looking to pay your bill online, know that search results might not get you to the right place. Instead, check your bill to find the online payment site. And, if possible, use a credit card. Credit cards offer the most protection against fraud, including the right to dispute charges if there are any problems.
Where to Learn More
Learn more about impersonator scams at ftc.gov/impersonators. If you spot an impersonator scam, tell the FTC at ReportFraud.ftc.gov.
Doxo Responds
Excerpts from a Doxo news release responding to the FTC Action:
Image from the Doxo website
Legal counsel of Doxo, Courtland Reichman of Reichman Jorgensen Lehman & Feldberg LLP: “The case ignores the fact that doxo meets and exceeds regulatory requirements and market standards.”
“We are disappointed in the FTC’s decision to file this suit,” said the legal counsel of doxo, Courtland Reichman of Reichman Jorgensen Lehman & Feldberg LLP.
“The case ignores the fact that doxo meets and exceeds regulatory requirements and market standards as they empower consumers and foster innovation in the marketplace. Despite doxo proactively addressing the FTC’s concerns, they filed a sensationalist lawsuit anyway. I’m confident that we will prevail as we fight this case on behalf of consumers and their interests, and doxo’s services will continue to be a beneficial addition to consumers and market competition.”
[…]
The Federal Trade Commission’s allegations reflect a lack of understanding and disregard for doxo’s services, how bill payments are processed and delivered to billers, and doxo’s continued due diligence in meeting and exceeding regulations and market standards.
[…]
[CEO and co-founder of doxo, Steve Shivers said:] “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 and continuing to bring innovation and transparency to this market.”
SIDEBAR:
More Details on FTC’s Action Against Doxo
From the FTC news release on April 25:
The Federal Trade Commission is taking action against bill payment company Doxo and two of its co-founders, charging that the company uses misleading search ads to impersonate consumers’ billers and deceptive design practices to mislead consumers about millions of dollars in junk fees they tacked on to consumers’ bills.
The complaint alleges that Doxo, its CEO and co-founder Steve Shivers, and its vice president and co-founder Roger 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.
The FTC’s complaint notes that, even though Doxo immediately charges a consumer for payment, in many instances, the company then prints a paper check that is mailed to the biller – arriving days or sometimes weeks after the customer believes their bill is paid. As a result, many consumers have had their utilities shut off, have had car and health insurance lapse, and have been charged fees and fines even though they paid their bills on time.
“Doxo intercepted consumers trying to reach their billers and tricked them into paying millions of dollars in junk fees,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to take action when companies use deceptive design tricks to harm consumers.”
According to the FTC’s complaint, Doxo purchases search engine ads that appear when consumers search online for information about companies they owe bills to. These ads are created to mislead consumers into believing that Doxo is affiliated with those companies. The complaint cites as an example Doxo’s ads that are designed to trick consumers into believing they are affiliated with a prominent medical testing company. Doxo bought ads that appeared when consumers searched for the company’s name or website, and the ads included headlines that included the company’s name but not Doxo’s.
Doxo’s landing pages prominently feature the biller’s company name and sometimes even their logo, even though Doxo generally does not have a formal relationship with the biller. In fact, less than two percent of the companies in Doxo’s “network” authorize Doxo to accept payments on their behalf, according to the complaint.
Once consumers provide their billing details, Doxo then shows a final payment amount, onto which the company tacks an extra fee that is included only at the final payment step, and even then only in greyed-out fine print.
The complaint also outlines Doxo’s deceptive process to sign consumers up for its recurring subscription program, noting that, until February 2024, after learning of the FTC’s proposed complaint, the company would automatically check the box to sign consumers up when they clicked to read a terms of service document. In addition, while Doxo said consumers would save on the company’s “delivery” fees, consumers paying for the monthly plan are still often charged those fees.
Tens of thousands of consumers have complained about Doxo’s deceptive practices, according to the complaint, with many pointing to the fact that they paid more than their actual bill amount, even when the actual billers did not charge for online payments. The complaints were so numerous that, in 2021, employees of a major search engine declared Doxo’s ads to be “super misleading,” but the company still has not changed the fundamental structure of its ads. The complaint points to multiple instances in which the company’s top executives, Shivers and Parks, were personally made aware of complaints against Doxo.
The complaint alleges that Doxo violated the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Gramm-Leach-Bliley Act.
The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Western District of Washington.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
The staff attorneys on this matter are James Doty and Edward Smith of the FTC’s Bureau of Consumer Protection.
The Federal Trade Commission works to promote competition and protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.