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Grubhub customers in Washington DC will receive $2.7 million in refunds after the company admits to charging hidden fees and using deceptive marketing to increase profits
- Grubhub agreed to pay $3.5 million lawsuit to customers in Washington DC after charging hidden fees from 2016 to 2022
- The company is set to issue $2.7 million to customers and $800,000 to DC
- DC Attorney General Karl Racine filed the lawsuit, accusing the company of offering bogus services, such as free delivery for Grub Hub Plus subscribers.
- Grubhub has since issued a statement promising transparency to customers.
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Grubhub is set to issue $2.7 million in refunds to customers in Washington DC after the company charged hidden fees to boost profits.
DC Attorney General Karl Racine filed the lawsuit against the food delivery company earlier this year alleging they were offering bogus services like “free delivery” to Grub Hub Plus subscribers.
The lawsuit claimed that users were still required to pay a service and delivery fee. It was also argued that the company misled customers by listing restaurant items at a higher price than on the original menu.
“Grubhub used every trick in the book to manipulate customers into paying far more than they were supposed to, and even worse, they did it at the height of a global pandemic when District residents were already struggling to get to end of the month,” Racine wrote in a statement. .
Grubhub must also pay $800,000 to settle the lawsuit with DC. Totaling a loss of $3.5 million.
Grubhub agreed to pay a $3.5 million lawsuit to customers and Washington DC after charging hidden fees from 2016 to 2022
DC Attorney General Karl Racine filed the lawsuit against the food delivery company earlier this year alleging they were offering bogus services like “free delivery.”
The food delivery company must now pay affected customers between January 1, 2016 and December 31, 2022 by crediting their Grubhub accounts.
Customers will be paid in three waves and can expect to receive a credit of between $4.50 and $10 to their accounts.
The amount must be redeemed within 90 days, or the company will need to send customers a check, according to the news outlet.
“Grubhub’s hidden fees and deceptive marketing tactics were designed for the company to make extra money at the expense of DC residents, but we’re not going to let them get away with this,” Racine wrote.
Grubhub will also need to inform customers of any additional fees.
The lawsuit claimed that Grubhub denied wrongdoing, but the company agreed to pay the settlement.
“Resolving this lawsuit is in the best interest of our business and the matter is now resolved,” said Liza Dee, a spokeswoman for Grubhub. The edge.
“Grubhub is committed to supporting all restaurants and diners, and is taking a number of steps to ensure pricing transparency.”
The company also posted a statement on its website touting its new transparency guidelines and terms of the deal.
Grubhub has since issued a statement promising transparency to customers.
Grubhub was also previously accused of ‘cybersquatting’ in 2019 for setting up 30,000 fake websites disguised as restaurant home pages linked in its app to jack up prices and charge crippling commission fees.
The company has reportedly bought 34,000 URLs since 2010 with names similar to existing restaurant pages and created copycat sites that even use the companies’ logos, according to The New York Post.
While the fake places usually have the same menu as the real ones, the prices were higher.
At the time, Grubhub denied any wrongdoing.