The Feds just charged a massive fuel-card company with fleecing truckers out of hundreds of millions of dollars
December 26, 2019
One of the trucking industry’s largest companies just got slammed with a lawsuit from the Federal Trade Commission. Atlanta, Georgia-based FleetCor counts tens of thousands of small businesses and individual truck drivers among its customer base. And, according to an FTC suit filed on Dec. 20, it’s fleeced those truckers out of “at least hundreds of millions” in extra fees. FleetCor rebuked these charges in a press release, calling the FTC charges “without merit.”
One key way the FTC alleges FleetCor leveraged extra cash out of its customers include waiting to charge extra fees until several billing cycles have passed. That makes it more challenging for truck drivers to see that those extra dings have appeared, because it could appear to be a normal fluctuation in one’s monthly bill.
Invoices also did not disclose that FleetCor charged these additional fees, the FTC says. Even more nitty-gritty account management reports did not clarify that extra fees were charged, according to the lawsuit.
These disputed fees comprise 3% of FleetCor’s revenue, according to a JP Morgan analyst report.
FleetCor said in a release sent to Business Insider that its “customer disclosures are clear and communicated repeatedly.”
“The Company’s card programs include a thorough and extensive on-boarding process that describes the program’s features in both online and written materials,” the release said. “These materials provide the information necessary to understand the benefits and fees associated with a chosen program. Further, we reiterate fee-specific terms on every customer invoice, itemize fees on management reports, and annually distribute complete Terms & Conditions to every customer.
Meanwhile, the FTC cited internal emails that called this practice “the most egregious customer impact we do as it takes customers by surprise (unless they’re really large) based on their experience with consumer cards.”
The company also did not provide its customers with the per-gallon savings it advertised, the FTC alleges. “Customers have saved a fraction of a cent per gallon—far less than the 5-10 cents per gallon frequently touted by the defendants,” the FTC said in a press release.
FleetCor rejected this charge in its press release, as well. “FleetCor’s savings offers are clearly articulated, defined and disclosed in its advertising,” the statement said. “Like other industry participants, the Company offers savings “up to” a maximum level, subject to specified caveats (e.g., purchase volume, account in good standing, preferred site selection, etc.).”
The suit comes less than a year after a Bloomberg report on FleetCor alleging truck drivers who use FleetCor, which brought in $2.4 billion in revenue in 2018, were getting slammed with extra fees. Meanwhile, CEO Ronald Clarke’s salary equaled the take-home pay of the CEOs of Visa and Mastercard combined, Bloomberg reported.
“Many companies try to nickel-and-dime you, but this can’t even compare,” Maria Kirk, the owner of an ice-delivery firm in Orlando, Florida, told Bloomberg in Jan.
Meanwhile, according to the JP Morgan report, FleetCor has a reported customer retention of 92.3%. “FLT has said that since 2017 it has made improvements with new and enhanced disclosures, which should help quell investor concerns surrounding disclosure changes as a remedy,” according to JP Morgan.
BY Rachel Premack
December 20, 2019
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