FleetCor fleeced small businesses, court rules on summary judgment

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.