ATLANTA (CN) — A global business payments company found to have charged customers millions in unauthorized fees asked an 11th Circuit Court of Appeals panel on Tuesday to invalidate a Georgia federal judge’s order prohibiting the company from making deceptive claims to customers about its fuel card products.
A 2023 permanent injunction stemming from 2019 Federal Trade Commission lawsuit permanently bars Corpay — formerly known as FleetCor Technologies — from selling or charging for add-on services without first securing customers’ express informed consent, prohibits the company from making misrepresentations to customers related to fees and timing of payments and blocks the company from failing to credit timely customer payments.
Corpay called the injunction terms “quite onerous” and said the injunction lets the FTC micromanage the company’s relationship with customers.
Arguing on behalf of the company, attorney Donald Verrilli of Munger, Tolles & Olson, raised issue with portions of the order requiring Corpay to obtain customers’ express informed consent by “conspicuously disclosing” each fee the company charges and prohibiting the company from hiding fee disclosures behind a hyperlink.
“Customers have a reasonable opportunity to avoid unwanted fees by clicking on a hyperlink, looking at a prominently-displayed box of their fees and choosing whether to consent or not,” Verrilli said.
U.S. Circuit Judge Barbara Lagoa, a Donald Trump appointee, appeared to agree with Verrilli, noting that using hyperlinks to disclose terms and conditions is lawfully allowed throughout the industry.
The FTC argued to the panel that Corpay’s past conduct is reason enough to bar it from using hyperlinks.
“There is a long history of FleetCor not just failing to disclose fees but affirmatively hiding fees from consumers. What FleetCor wants to be able to do here is continue hiding fees,” FTC attorney Matthew Hoffman said. “Most people never click on the hyperlink and FleetCor knows that. The reason they want to do a hyperlink is because they know most people aren’t going to see those disclosures.”
Verrilli also argued the injunction is unnecessary because Corpay launched new consent procedures in 2020 and “completely overhauled” its systems. U.S. District Judge Amy Totenberg wrongly concluded when granting summary judgment to the FTC in 2022 that his client’s unlawful conduct might reoccur, the attorney said.
“I think it’s quite obvious given that the procedures we adopted in 2020 and were using at the time of the injunction in 2023 are lawful,” Verrilli said. “All the district court had to do was order us to keep doing what we were doing.”
Hoffman noted Totenberg already heard Corpay’s evidence of the supposed changes to its system but wasn’t convinced.
“[Totenberg] determined this was what was reasonably necessary to prevent future violations,” Hoffman said.
Senior U.S. Circuit Judge Charles Wilson appeared to agree with the FTC.
“When I look at the record I don’t see any assurances by FleetCor indicating any intention to avoid any future violations of [the law],” the Bill Clinton appointee said.
U.S. Circuit Judge Robin Rosenbaum, a Barack Obama appointee said she believed the injunction was remedial.
“Particularly towards existing customers who were lured in by the failure to disclose fees and by the fraudulent advertising,” she added.
But Lagoa questioned how Totenberg could have determined an ongoing harm to customers existed when the lower court’s findings were limited to Corpay’s conduct before changing its policies.
Hoffman said there was evidence of ongoing conduct from the company’s own marketing surveys, including a February 2020 survey of 70 customers which found 53% of them left the company because they felt misled by undisclosed fees.
The FTC estimated Corpay caused $213 million in damages to customers from unfair late fee billing and approximately $320 million in damages related to other unauthorized fees. The commission abandoned its claim for monetary relief after the U.S. Supreme Court ruled in 2021 that Section 13(b) of the Federal Trade Commission Act does not authorize the agency to seek restitution or disgorgement of profits.
Corpay markets and sells fuel cards to mostly small- and medium-sized business operations that then distribute the cards to employees to use for fuel, vehicle maintenance and other goods and services.
The company’s advertisements falsely promised gas discounts, no transaction fees and the ability to limit employee spending. Corpay also charged late fees even when customers paid on time.
Totenberg found that the company violated Section 5 of the Federal Trade Commission Act through its false advertisements and by charging customers hidden fees for fuel cards, failed to inform most customers about fees when they signed up and did not make its terms and conditions available online until 2017. The company instead mailed customers a copy of the terms and conditions in a tiny font only after they signed up for fuel cards.
The panel did not indicate when it will issue a decision.