Corpay agrees to $100 million FTC settlement

Corpay, the digital payments and spend management company formerly known as FleetCor, and its CEO have agreed to pay $100 million to settle a Federal Trade Commission administrative action. At issue are allegations that the company charged its customers, primarily small businesses, undisclosed fees in connection with their use of fuel cards the company promised would save the businesses money.

In a complaint filed in 2019, the company and its CEO, Ronald Clarke, were alleged to have imposed a broad array of unauthorized fees that customers never knew about and did not agree to pay. The unauthorized fees totaled hundreds of millions of dollars and harmed tens of thousands of customers, the FTC alleged.

Additionally, the company charged late fees to customers who had either paid on time or were prevented by FleetCor from paying on time. FleetCor also misrepresented the gas savings, fraud-control features and fees associated with its fuel cards, the FTC alleged.

According to the complaint, FleetCor often waited to begin charging many fees until several billing cycles had passed, making them less noticeable to customers. The complaint also alleged the company's invoices did not disclose that any fees were being charged, requiring customers to proactively view other account management reports. Even on those documents, however, many fees were obscured among other information or not listed at all.

Court sides with FTC

In 2023, a federal district court entered summary judgment for the FTC on all counts, finding that FleetCor had charged its customers hidden or otherwise unauthorized fees and misrepresented gas savings and fees associated with its fuel cards. That summary judgment has now been upheld by a federal appeals court, affirming a permanent injunction against the company. The appeals court affirmed the judgement against Clarke on all but one count.

The court-imposed order permanently prohibits the company from engaging in several practices. Most prominent among these are:

• Billing a customer for any charge unless it has obtained the customer's express informed consent and provided clear and unavoidable information about the charge;

• Hiding material information about a charge behind a hyperlink; and

• Making deceptive claims about its fuel cards.

As part of the settlement order with the FTC, FleetCor (nee Corpay) and Clarke will pay $100 million, which will be used to redress business customers harmed by the errant practices. The company and Clarke also have agreed not to oppose reimposition of a federal court injunction against Clarke.

"FleetCor deceived its small business customers by promising fuel savings that never materialized, while unfairly charging then hidden and unauthorized fees," said Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection. "In addition to the relief the FTC has obtained in federal court, this order will help return money to the customers the company took advantage of.

Just the latest FTC action against payments companies

The Corpay settlement is the latest in a series actions the FTC has settled involving payments companies this month.

The ISO Humboldt Merchant Services agreed to pay $12 million and accept sweeping restrictions on its business to settle FTC allegations that it knowingly facilitated payment processing for more than 1,000 sham merchants tied to unauthorized billing schemes.

The Humboldt case followed an action against the ISO Nuvei, which agreed to pay $4.85 million to settle allegations that it opened and maintained accounts for merchants that it knew, or should have known, were engaged in deceptive conduct. The Nuvei case involved payments for merchants involved in tech support scams in addition to other allegedly deceptive businesses.

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