What The Platform Says. What The Platform Does.

The FTC’s unfair and deceptive practices cases against digital businesses have produced settlements requiring tens of millions of dollars -- sometimes $100 million or more -- in consumer redress or civil penalties. These cases can also expose individual officers to personal monetary liability and continuing restrictions on their business activities. In-house counsel should draw on these cases and settlements to strengthen compliance programs and train executives and employees to recognize when practices involving fees, subscriptions, earnings claims, and access restrictions can conflict with the company’s representations to its users. Beyond significant monetary relief, FTC orders can require companies to change their operations and submit to continuing reporting and monitoring requirements.

Five categories of conduct in the complaints

Unauthorized charges and lock-out. The complaint against Verity International, an Internet billing intermediary, alleged that its system billed telephone subscribers for access to adult websites by identifying the telephone line used, without verifying that the subscriber had authorized the purchase, and that subscribers were told they had to pay even when someone else had incurred the charges without permission. The complaint against Neovi, operator of the Qchex online check-creation and delivery service, alleged that for years the company created and delivered checks drawn on whatever bank account a customer identified, without verifying the customer’s authority over that account, and that the micro-deposit and voided-check procedures it later represented it had adopted were not consistently required.

In other matters, the user has paid, but the business refuses to grant (or withdraws) access to what the user has paid for. The complaint against Grubhub, the food-ordering and delivery platform, alleged that its fraud-detection system blocked the accounts of diners who loaded large or multiple gift-card balances, canceling their orders and freezing the balances, without telling them they had been blocked, why, or how to contest the block. Customer-service agents told diners that a fraud team would call within 24 to 48 hours; the complaint alleged that it rarely did, that an internal document acknowledged that neither diners nor the agents were told future orders would be refused, that more than 97 percent of the diners blocked in one month were never unblocked, and that Grubhub+ subscribers continued to be charged the monthly fee while unable to order. The Commission charged the practice as unfair. MoviePass advertised a subscription allowing consumers to attend one movie each day. The Commission alleged that the company set out to reduce use by its most frequent subscribers. It invalidated the passwords of 75,000 heavy users on the pretext of “suspicious activity,” although an executive acknowledged that the reset process would fail for many of them. It required the top 20 percent of users to photograph and upload their ticket stubs, told them they had been “randomly selected,” and relied on software that often did not work. It also set undisclosed spending caps for groups of subscribers. Once a group’s allotment was spent, every member lost access, sometimes after arriving at the theater.²

Subscription enrollment and cancellation. The complaint against JustAnswer, an online service connecting users with experts, alleges that a consumer who agreed to a $1 or $5 fee to ask a question was charged that fee and a monthly membership of $28 to $125 at sign-up. The only reference to the membership and the fee had been moved into fine print below the credit card fields. The complaint against Instacart, a grocery-delivery service, alleged that its free-trial enrollment process did not clearly disclose that consumers would be charged for Instacart+ memberships when their trials ended or explain the restrictive refund policy, and that the company consequently charged consumers for memberships without their express informed consent. The bill-payment service Doxo allegedly used a terms-of-service link that silently selected a paid subscription when clicked. The complaint against Chegg, an educational subscription service, charged a single count under the Restore Online Shoppers’ Confidence Act for failure to provide a simple cancellation mechanism, and the complaint against Shutterstock, a stock-image subscription service, challenged early-cancellation fees that its enrollment disclosures did not make clear.

The complaint against Hims & Hers, an online telehealth company, filed recently with California and Utah authorities as co-plaintiffs, combines all three practices. The company advertised a free consultation, and its intake form ended with a “Pay $0 today” button and the assurance that the consumer would be charged only if medication was prescribed; the complaint alleges that in most states a provider prescribed without any consultation, at which point the company immediately charged and enrolled the consumer. The first refill allegedly was charged ten days before the selected refill date, with a cancellation deadline disclosed only in small, low-contrast text beneath that button, and canceling online required finding a button labeled “Add/remove items from order,” unchecking every item in the subscription, and answering three to ten survey questions.³

Misleading claims about pay and available work.Handy, a service connecting customers with household service providers, advertised handyman jobs at up to $45 an hour. According to the complaint, median pay after fines and fees was often at least $20 an hour below the advertised rate, and fewer than 10 percent of workers in many of the regions where the advertisements ran earned the advertised rate. The complaint against Care.com, a platform connecting families with caregivers, alleged that advertised job totals included postings from families on free accounts, who could not hire through the platform without upgrading to a paid membership. Care.com, the complaint alleged, neither disclosed the distinction before caregivers subscribed nor identified those postings in the listings caregivers saw afterward. The complaint against Grubhub alleged that recruiting advertisements promised drivers hourly earnings such as $26 when the median driver earned $11 and only about 2 percent earned the advertised amount.⁴

Price and fee disclosures. The complaint against Grubhub also alleged that it advertised a low delivery fee but added service and small-order fees at checkout, where they appeared as “Other fees” in small, faint print, explained only to consumers who clicked an information icon. The complaint against LendingClub, an online lending platform, alleged that the company deducted origination fees from loan proceeds despite advertising “no hidden fees.” The complaint against Corpay, then FleetCor, which marketed fuel cards to businesses with vehicle fleets, alleged that its advertisements promised savings on every gallon while fine-print disclaimers at the bottom of the same advertisements excluded large retailers that its customers’ drivers frequently used, that its fee terms appeared only in small-print, multi-page terms and conditions, and that an employee reviewing a program mailer could not find its opt-out language, which was in the footer. The Eleventh Circuit held that the disclosures did not cure the advertisements’ misleading impression; they were so small that the company’s own employees used enlarged copies to read them. In a recently announced settlement, Corpay and its chief executive agreed to pay $100 million to resolve the related administrative proceeding, subject to public comment and final Commission approval.⁵

Advertised rules and actual practices.Opendoor bought homes from owners who wanted to sell without listing. The Commission alleged the company told sellers the offer reflected its estimate of market value, while it reduced the offer below that estimate to cover anticipated repair costs and kept the difference when assessed repair costs were lower. FloatMe advertised cash advances of up to $50, but the Commission alleged that new subscribers could receive no more than $20. The company told consumers that their limits would increase automatically over time, although increases allegedly depended on manual decisions under undisclosed criteria. The complaint also alleged that FloatMe charged subscription fees to consumers whom its rules categorically excluded from receiving advances because their income came from public assistance, a practice challenged under both Section 5 and the Equal Credit Opportunity Act. The complaint against Live Nation and Ticketmaster alleges that Ticketmaster advertised limits on the number of tickets one person could buy for an event but knowingly allowed brokers to exceed those limits through multiple accounts and resell the tickets on its own marketplace at higher prices, generating additional fees for the company.⁶

The Commission’s proposed personalized-pricing policy likewise addresses discrepancies between pricing representations and actual practices. The draft statement would treat as likely deceptive a price represented, expressly or by implication, as static or widely offered when it is individualized, and a personalized price whose basis is misdescribed, such as a higher price based on disposable income presented as a discount based on the consumer’s purchase history.⁷

Company records and responses to concerns

What the company’s own records show. The Chegg complaint cited an executive’s acknowledgment that some apparent subscriber retention reflected confusion about the multi-page cancellation process. The Shutterstock complaint cited employees’ discussions of unexpected early-cancellation fees and their acknowledgment that enrollment disclosures lacked transparency. The Hims & Hers complaint also quotes internal statements. Shown data that up to 10 percent of cancellations by mental-health patients occurred on the day of enrollment, the chief executive wrote, “Essentially it means whatever they received they did not want, right?” The customer-insights team labeled the complaint that consumers did not understand that submitting the intake form was an agreement to pay “checkout whiplash.” An internal research document reported that changes to the California online cancellation flow had reduced cancellations by 18 percent; the company later extended that version to most other states. Two customer service agents described the cancellation path as “a bit of a dark pattern.”⁸

The company’s response to warnings, complaints, and investigations. The Commission looks at whether a company was alerted to a concern – often by employees or users – and whether its changes, if any, addressed it. Handy employees allegedly began lowering advertised earnings rates after an FTC demand, but misleading claims continued. At LendingClub, internal compliance reviews and an investor warned that the origination-fee disclosure could mislead borrowers, yet the company allegedly made the “no hidden fees” claim more prominent and the disclosure less prominent in a redesign. Doxo ended its silent subscription selection only after receiving the FTC’s draft complaint. Neovi continued producing unauthorized checks even after account holders complained. Hims & Hers, according to the complaint, instructed its agents to deny refunds to consumers who said they had been confused about enrollment and, for roughly a year and a half, permitted them to cancel a first order only if the request arrived within an hour of the prescription. The company briefly offered in-app cancellation and removed it when cancellations rose; according to the complaint, executives weighed the improved customer experience against a million dollars of subscription revenue each quarter. It revised the screen shown after submission only about two years after receiving a civil investigative demand, and then only marginally.⁹

Designing the compliance program

Checking whether a business’s representations match its actions requires information from marketing, product, billing, and customer support. The review should be done before launch and repeated whenever the service changes.

Assign responsibility. Identify the business units responsible for conducting reviews and supplying the information needed to analyze the company’s representations. Specify who decides whether a concern – expressed internally or by users – warrants action, who may approve or reject a proposed correction, and who resolves disagreements.

Train the people who make or approve representations. Training should reach everyone who creates, approves, or communicates representations, including marketing, product, growth, and engineering staff and senior executives. An officer who answers a user’s question by restating the company’s standard description of how a price is set has made a representation. (The Commission regularly names officers and owners as defendants or respondents. An individual may be liable where the individual had some knowledge of the challenged practice and either participated directly in it or had authority to control it.¹⁰) Use the business’s own advertisements and screens, and explain when a claim needs legal review and to whom an unresolved question goes. Update the training when a product change affects what employees can accurately tell users.

Ask five questions. Use the questions before launch and at periodic review. Revisit the affected questions when a change to pricing, fees, payment allocations, eligibility rules, or disclosure placement could change the answers, before the change if possible and again afterward. Revisit them when complaints or testing suggest that users understand the offer differently from the company.

1. Who confirmed that each material statement is accurate, and who confirmed that the user authorized the charge or recurring-charge arrangement? Inventory every statement about price, pay, eligibility, access, or cancellation, including enrollment and cancellation screens and anything behind a link or hover-over, and keep the evidence that the user received the required notice and agreed to the charge or recurring-charge arrangement. Retain the substantiation for each earnings claim, including evidence showing whether the figure is typical and, for an “up to” claim, how many similarly situated workers attain it. For payment services, check how the system verifies both the user’s identity and authority over the account to be charged. The Neovi injunction required specified identity and account-control checks before checks could be created or delivered, or an alternative verification process approved by a monitor.¹¹
2. Who tested what the system actually does against those statements? The system is the software, interfaces, rules, models, procedures, and staff decisions that determine what users see, authorize, pay, or receive. Test how the system calculates charges or payments and compare the results with the company’s representations. Assess the lawfulness of eligibility rules and benefit limits, including whether the business charges users whom its rules exclude from receiving the advertised service.
3. Can the user understand the terms before committing, and the charge or payment afterward? Use the orders’ provisions on clear and conspicuous disclosure as a drafting benchmark. The Grubhub order requires covered disclosures in interactive media to be unavoidable, without requiring consumers to click a link or hover over an icon to understand them. For post-transaction billing, the FleetCor order requires one statement each cycle showing the total amount due, with the fees itemized on the first page.¹² Watch recurring claims such as free, up to, no hidden fees, paid daily, unlimited, and cancel anytime. Check whether users learn the material limitations before committing, including any figure the business has already calculated for that user, such as the amount it will actually advance, pay, or charge. If testing shows that more users complete a purchase or enrollment when a material disclosure is less prominent, examine whether the increase reflects users overlooking or misunderstanding the term. Consider the test’s design and other evidence of user understanding before drawing a conclusion. Where consumers reasonably expect prices not to depend on their personal data, the Commission’s draft statement calls for clear and conspicuous disclosure of whether the price is personalized, how the personalization works, and the data categories used. The draft states that describing a price as “specially selected” would likely be insufficient.¹³
4. What do complaints, internal memoranda, and tests show? Identify the evidence that conflicts with the company’s representations and find out why. Weigh it against the evidence that supports the company’s position before deciding whether to change the practice.
5. Which substantiated concerns remain open, who owns them, and when will they be fixed? Keep a running list of open concerns, with an owner and a deadline for each. Confirm that the correction works before closing the matter. The Neovi order required defendants to suspend a customer’s access to the service upon notice of alleged unauthorized use of financial account information, investigate and respond within five business days, and terminate access if unauthorized use was confirmed. The Grubhub order sets safeguards for a user whose account is blocked. The company may not block an account that holds stored funds without written notice, sent at the same time, stating the reason, the effect on the account, and how to challenge the block. The user must be able to dispute the block immediately, submit supporting documents, and reach a live agent by chat or telephone. The company must issue a written determination within 48 hours of a dispute. If the block was unwarranted, it must lift the block, restore the funds, and notify the user within 12 hours. It may not charge a subscription fee while an account is blocked.¹⁴ Businesses not under an order should set procedures and deadlines that fit their own risks and legal obligations.

Document reviews and set retention policies. For material compliance reviews, maintain a concise, accurate record of the issue examined, the basis for the decision, and any corrective action and follow-up. Counsel should decide when a concern needs legal review and direct that review, and should advise how to handle communications seeking or providing legal advice.¹⁵

Counsel should also help set the categories of compliance records to retain and their retention periods, taking account of business needs, legal requirements, any governing order, and preservation obligations.¹⁶

Conclusion

A business that tests its representations against its actions, both routinely and in response to complaints, can identify discrepancies before an enforcement agency does. If asked, it should be able to show what it examined, what the evidence showed, and why it changed or kept the practice.

Footnotes

1. Deception asks whether a representation, omission, or practice was likely to mislead a consumer acting reasonably, and whether it was material; unfairness asks whether a practice causes or is likely to cause substantial injury that the consumer cannot reasonably avoid and that is not outweighed by countervailing benefits to consumers or competition. 15 U.S.C. § 45(a), (n); FTC Policy Statement on Deception (Oct. 14, 1983); FTC Policy Statement on Unfairness (Dec. 17, 1980). Unfairness does not require a misleading representation; the unauthorized-charge and lock-out matters below rest in part on that theory, and a compliance review should cover such practices as well. The companion appendix identifies the monetary-relief authority and current status of the cited matters and links to the principal source documents.

2. Complaint, Verity International, 12–16, 22–28; FTC v. Verity International, Ltd., 443 F.3d 48 (2d Cir. 2006) (affirming deception liability; the unfairness determination was affirmed as unchallenged on appeal); Complaint, Neovi, 11, 20–26, Count I; FTC v. Neovi, Inc., 604 F.3d 1150 (9th Cir. 2010) (affirming unfairness liability and describing a validation system that checked one bank account per user, left additional accounts unverified, and did not apply to emailed checks); Complaint, Grubhub, 9, 88–108, Count II; Complaint, MoviePass, 8–32, Counts I–II.

3. Complaint, JustAnswer, 19–20, 29–30, 37–39, 43, 78, Counts I–III; Complaint, Instacart, 58–75, Counts IV–V; Complaint, Doxo, 5, 61–64, Counts IV–V; Complaint, Chegg, Count I; Complaint, Shutterstock, 20–30; Complaint, Hims & Hers (Dkt. 28), 20–30, 40–43, 50–54, Counts III–VI.

4. Complaint, Arise, 3–4, 20–27, Counts I–II; Complaint, Handy, 16–36, Counts I and V; Complaint, Care.com, 3, 13–14, 20, 25, 33–36, Counts I–II; Complaint, Grubhub, 13, 157–167, Count V.

5. Complaint, Grubhub, 42–48, Count I; First Amended Complaint, LendingClub, 23–25, Count I; Complaint, FleetCor Techs., Inc., No. D-9403, 7–9, 24, 77–78 (issued Aug. 10, 2021); FTC v. Corpay, Inc., 164 F.4th 807, 835–37 (11th Cir. 2026); Proposed Decision and Order, FleetCor Techs., Inc., No. D-9403, §§ I, V, and Analysis of Proposed Consent Order to Aid Public Comment, at 1–2 (Sept. 17, 2026).

6. Complaint, Opendoor, 32–37, 49, 51, 57(a), Count I; Complaint, FloatMe, 30–40, 61–66, Counts I, III, and VIII; Complaint, Live Nation/Ticketmaster, 14–16, 90–93, 116–118 (Count II).

7. Federal Trade Commission, Proposed Enforcement Policy Statement Regarding Personalized Pricing (Aug. 19, 2026) (Docket No. FTC-2026-1057). The statement would be nonbinding and would create no private rights. See Bilal Sayyed, FTC draft personalized-pricing policy would require more than a “personalized price” disclosure (Hogan Lovells Cadwalader, Aug. 25, 2026).

8. Complaint, Chegg, 76, 81; Complaint, Shutterstock, 4–35, 81; Complaint, Arise, 20–27 & tbl. 1; Complaint, Hims & Hers, 36–37, 55, 57.

9. Complaint, Handy, 24–25, 73–75; First Amended Complaint, LendingClub, 23–24, 26–27; Complaint, Doxo, 5, 61–64; Complaint, Neovi, 29–30; Neovi, 604 F.3d 1150; Complaint, Hims & Hers, 32, 40, 58–59, 78–79.

10. FTC v. Corpay, Inc., 164 F.4th 807, 843–45 (11th Cir. 2026) (requiring some knowledge of the practice and either participation in it or authority to control it, and vacating summary judgment against the chief executive on one count for want of evidence that he knew of the advertisements at issue); Order, FloatMe, §§ VIII–IX ($3 million against the company and its two founders, jointly and severally); Proposed Order, Doxo, Dkt. 199, § VIII (proposed judgment against the corporate defendant only, while Shivers and Parks would be subject to the injunction); In the Matter of MoviePass, Inc., Docket No. C-4751, Decision and Order, Definition C (conditionally excluding the corporate respondents from Sections II–X while their bankruptcy cases remain open, subject to specified exceptions); Complaint, JustAnswer (naming the chief executive as a defendant).

11. Stipulated Order, Handy, Dkt. 3-1, §§ I.B, X.G (Jan. 7, 2025) (substantiation and retention of support for earnings claims); Final Order, FTC v. Neovi, Inc., No. 3:06-cv-01952-JLS-JMA, Dkt. 118, § I.1–3 (S.D. Cal. Jan. 7, 2009).

12. Order, FTC v. FleetCor Technologies, Inc., No. 1:19-cv-05727-AT, Dkt. 355, § V.B (N.D. Ga. June 8, 2023); Stipulated Order, FTC v. Grubhub Inc., No. 1:24-cv-12923, Dkt. 13, Definition D.4 (N.D. Ill. Dec. 31, 2024).

13. Proposed Enforcement Policy Statement Regarding Personalized Pricing, supra. The draft also states that collecting or using personal data for personalized pricing without adequate disclosure or consent, or basing a personalized price on personal data without adequately verifying that the consumer consented to its collection for that purpose, may independently violate Section 5.

14. Final Order, Neovi, Dkt. 118, § III.B–C; Stipulated Order, Grubhub, Dkt. 13, § II.A–B (Dec. 31, 2024).

15. Nonprivileged business records and review findings may be discoverable when relevant to the claims or defenses and proportional to the needs of the case, and may support or undermine the company’s position. Fed. R. Civ. P. 26(b)(1). A review conducted at counsel’s direction to provide legal advice may be privileged, but direction alone does not privilege an ordinary operational review, and the privilege does not shield the underlying facts from otherwise proper discovery. Upjohn Co. v. United States, 449 U.S. 383, 395–96 (1981); In re Kellogg Brown & Root, Inc., 756 F.3d 754, 758–60 (D.C. Cir. 2014). Work-product protection turns on whether the document was prepared because of anticipated litigation. FTC v. Boehringer Ingelheim Pharms., Inc., 778 F.3d 142, 149 (D.C. Cir. 2015).

16. Particular orders impose their own recordkeeping obligations; the Instacart order, for example, requires retention of digital copies of negative-option enrollment screens and linked content. Stipulated Order, Instacart, Dkt. 15, § XI.E (Jan. 13, 2026). Retention policies should apply equally to favorable and unfavorable records and accommodate preservation duties, including those arising when litigation is reasonably anticipated. See Fed. R. Civ. P. 37(e) & advisory committee’s note to 2015 amendment.