Doxo Class Action: Bill Payment Service Accused of Deceptive Fees

A new class action lawsuit accuses bill payment service Doxo of tricking consumers into paying unnecessary fees through a deceptive business model. The lawsuit, filed by Connecticut resident Douglas Mundle, details how Doxo allegedly uses "dark patterns" and misleading practices to mislead consumers and siphon off millions in fees.

Doxo Accused of "Dark Patterns" and Deceiving Consumers

Mundle's lawsuit claims Doxo creates webpages designed to mimic real billers' online payment portals. This design allegedly tricks consumers into believing they are on the official bill payment site for their service providers and that using Doxo is mandatory. Doxo also hides its service charges until late in the payment process, after users have already entered their billing information, making it seem like the fees are required by the biller itself.

Mundle claims he was deceived on multiple occasions. In separate instances, he attempted to pay a medical bill, a toll charge, and an orthopedic surgeon bill online. Each time, a web search directed him to a Doxo webpage that closely resembled the official payment portal of the biller.

Believing he was using the legitimate platform, Mundle unknowingly paid Doxo's service fees to complete his payments. Only later did he learn Doxo was an unnecessary third-party and the fees were avoidable.

Lawsuit Claims Doxo's "Bill Pay Network" is a Sham

Doxo claims to have a vast "Bill Pay Network" with over 120,000 service providers. However, a recent FTC complaint against Doxo contradicts this claim. The FTC alleges that less than 2% of the billers listed on Doxo's platform have actually authorized them to collect payments. Doxo is also accused of deceptive marketing practices. 

They allegedly pay millions for search engine advertising to ensure their website appears as the top result when people search for ways to pay bills online. This practice increases the chance of consumers landing on their look-alike websites and falling victim to their tactics.

The lawsuit further alleges that Doxo signs users up for their paid subscription service, doxoPLUS, without their knowledge or consent. Additionally, the service is falsely advertised as a way to save on fees, when in reality, non-subscribers are charged the same fees for most payment methods.

Perhaps even more concerning, the complaint contends that Doxo uses mailed checks to deliver payments, even though many consumers believe their bills are paid electronically when using Doxo. This delay can lead to late fees and service disruptions for unsuspecting consumers.

Doxo Has Ignored Complaints from Customers and Billers 

Numerous consumer complaints echo the experiences of Mundle, who also encountered these issues. These consumers believed they were paying their billers directly, only to discover Doxo's involvement and the subsequent fees. Some even faced service disruptions due to Doxo's delayed payment processing. A 2022 survey revealed that roughly 30% of frequent Doxo users mistakenly thought Doxo was their sole bill payment option.

In response to these practices, tens of thousands of customers have voiced complaints to Doxo, highlighting their perception of being misled, according to the lawsuit. These complaints include:

• “I didn’t even know that I was actually dealing with a third party bill pay system when the hospital doesn’t even charge you to make a payment online.”
  
  
• “DOXO spoofs [company name] pretending to be that water utility…. The way they position themselves makes it seem like it is the only way to pay your bill.”
  
  
• “I was completely unaware I was using Doxo. They sleazily set it up some way, I dont know how, so you think you are paying directly.”

These consumers have reportedly complained directly to Doxo that they “received warning letters from bill collectors for medical bills they had already paid.” 

“mDoxo customers have ‘had their water, gas, internet and electricity turned off,’ ‘missed child support payments,’ and ‘have double paid their bills (once to Doxo, once to the biller) to avoid service cutoffs – all for payments that Doxo promised them would be made ‘directly’ to their billers’”, the lawsuit states.

In the Doxo bill pay class action lawsuit, Mundle seeks to represent anyone in the US who has used Doxo's services and been charged fees since January 1st, 2008. He aims to end Doxo’s and its founders’ fraudulent activity and return to consumers the millions of dollars of junk fees that Doxo extracted from consumers through fraud and deceit.

Case Details

• Lawsuit: Mundle v. Doxo Inc. et al.
• Case Number: 2:24-cv-00893
• Court: U.S. District Court for the Western District of Washington at Seattle

Plaintiffs' Attorneys

• Thomas E. Loeser and Karin B. Swope (Cotchett Pitre & McCarthy LLP)
• Derek W. Loeser, David J. Ko, and Andrew N. Lindsay (Keller Rohrback LLP)