Federal Trade Commission v. FleetCor Technol., Inc., --- F.Supp.3d ----, No. 1:19-cv-5727-AT , 2022 WL 3273286 (N.D. Ga. Aug. 9, 2022)
The really enraging thing about this case is that it breaks
no new legal ground, and illustrates exactly why FTC needs a strong mechanism
to get consumer redress in a reasonable period of time. FleetCor promised
savings on diesel purchases. It collected hundreds of millions of dollars from
businesses, often run by unsophisticted individuals/people with limited
English, through false advertising, a barrage of undisclosed fees that were
concealed from customers by not being shown on bills—some not were even buried
in vague contractual language—and unwarranted late fees from people who
actually paid on time. Among many other things, FleetCor advertised that
businesses could issue drivers “fuel only” payment cards in order to get
greater protection against misuse, while internally acknowledging that the
cards weren’t capable of limiting purchases to fuel only—in one case, a driver
bought $200,000 in Speedway gift cards using the FleetCor card. And there was a
misleading CO2 emissions fee of 5 cents a gallon that they tacked on (done on
an opt-out basis rather than opt-in to raise revenue, so how that even
relates to CO2 emissions is a good question).
The court granted summary judgment to the FTC on both
deceptiveness and unfairness, and held the CEO, Ronald Clarke, individually
liable given his control and knowledge (to give you a sense, he called reports
of deceptive practices “fake news” and reassured investors about customer
complaints but gave no direction to subordinates to resolve the complaints).
The FTC can’t use this case to get monetary redress, but
there is a suspended administrative proceeding at the agency that perhaps can
do something to help the victims eventually. I won’t go through the evidence
the court reviewed both of the deception/unfairness and the suffering and loss
it caused, but I will quote a few paragraphs from the discussion of injunctive
relief to give you a sense of the conduct:
Here, the mountain of evidence
presented by the FTC demonstrates that FleetCor’s violations were far-reaching.
FleetCor’s ads were not “isolated inciden[ts] of deception” but rather left
customers consistently feeling swindled and misled. FleetCor’s misleading fee
practices were even more pervasive. Not only were these recurrent, but the
“degree of scienter” involved is plain. Nearly a dozen internally commissioned
studies and surveys, plus dozens of emails of high-level employees, establish
that FleetCor was well aware that customers were being hoodwinked. More than
that, there is unrefuted evidence in the record that the conduct was intentional
— and that it came straight from the top. [citing CEO’s request for
“opportunities to get more late fee revenue in 2018 .... thru a higher rate,
less/no grace days, etc, etc.”]
The record indicates that
FleetCor’s deceptive advertising and unfair fee practices were ingrained in the
fabric of the company for years.
Further, Defendants have in no way
“recogni[zed] the wrongful nature of their conduct” and, as the business is
still fully operational, the “occupation” surely “present[s] opportunities for
future violations.”
Beyond these sprawling prior
violations, there is demonstrable record evidence — contrary to Defendants
emphatic position — that FleetCor’s unfair practices persist. For example,
FleetCor’s own internal study from 2020 found that, of individuals who
“attrited” (i.e., stopped using FleetCor cards), “53% felt misled and 26%
claimed fees were not accurately described or disclosed.” FleetCor has not
provided any evidence that it has implemented an affirmative disclosure process
or that it does not automatically opt customers in to fees for “programs” they
have not requested. And while the specific advertisements at issue in Count
I–III are no longer circulated, such voluntary cessation is not adequate to
protect against future violations where FleetCor is easily able to put forth
similar ads anew.
Congress could help the victims, and the others that the FTC
is tasked to protect, by restoring the agency’s ability to get consumer redress
in court. It should do so posthaste.
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