Grubhub must pay $3.5 Million to settle claims that it charged customers hidden fees

It was Grubhub She was ordered to pay $3.5 millionto settle a District of Columbia lawsuit alleging that the company bilked customers by charging hidden fees. Please contact me press releaseGrubhub will pay DC $800,000. As a civil penalty, the remaining $2.7 million will be repaid by affected customers.

March DC Attorney General Carl Racine sued GrubhubGrubhub Plus was accused of promising customers “free” online orders as well as unlimited free delivery. The suit claims that this practice is “deceptive” because Grubhub still charges a service charge for no-pickup orders for Grubhub Plus customers and also charges delivery and service fees for standard order.

He also mentions some questionable business practices, including the way Grubhub combined service fee on one line with sales tax on the checkout page. This was something that the company only recently stopped doing. Formerly Grubhub Accused of listing restaurants on the platformThey cannot authorize the expansion of the service without their permission. Launched a series of small websitesThey can be accessed through Grubhub as real websites for restaurants. The lawsuit was filed on the date indicated. Grubhub refuted the claimsHe said that “many of these practices have been stopped.”

Grubhub spokeswoman Lisa Dee stated in a statement The edge. “Grubhub is committed supporting all restaurants, diners, and is taking a variety of steps to ensure pricing transparency.”

Grubhub has been ordered to “place an refundable credit” in customers’ accounts. This applies to anyone who placed an order through Grubhub at DC-area restaurants between January 1, 2016 and December 31, 2022. Based on how frequently they use the platform, affected customers will be divided into three groups. The first group gets at least $4.50, followed by $7 and $10, respectively. Grubhub will send a check to the account owner if the balance is not received within 90 days.

The platform needs to make several changes beyond payment. It should prominently display any additional fees to customers at checkout. It should also list each fee on separate lines. It should also close or transfer ownership of small locations it has built to other restaurants in the capital. Grubhub Plus members should stop being told that they can get “free delivery” and should disclose when prices are higher than advertised at restaurants. in update posted on their websiteGrubhub claims it has agreed to provide “more clarity to our customers” and to partner with thousands of restaurants.

“Grubhub used every trick in the book to manipulate customers into paying much more than they were due, and even worse, they did it at the height of a global pandemic when residents of the region were already struggling to make ends meet,” Racine says in a statement. “Grubhub’s misleading marketing tactics and hidden fees are designed to extract additional profits for the company at D.C. residents’ expense, but we won’t allow them to get away with it.”

Update, 2:06 PM ET Updated to include a statement by a Grubhub spokesperson.