Instacart Settles FTC Case, Agrees to $60 Million in Consumer Refunds
The Federal Trade Commission (FTC) announced a significant settlement with Instacart, a prominent grocery delivery service. Instacart will pay $60 million in consumer refunds due to claims of deceptive practices. These practices allegedly misled shoppers and inflated grocery costs for Americans.
Instacart’s Deceptive Practices Under Scrutiny
According to the FTC, Instacart engaged in various unlawful tactics that unfairly impacted consumers. The settlement mandates that the company cease these deceptive operations moving forward.
- Consumers will receive refunds if they were charged for Instacart+ without proper consent.
- Instacart must stop false advertising related to delivery services and satisfaction guarantees.
Allegations Against Instacart
The FTC’s investigation revealed multiple misleading tactics used by Instacart:
- Misleading Free Delivery Claims: Instacart advertised “free delivery” but included mandatory “service fees” that could raise costs by up to 15%.
- False Satisfaction Guarantee: The company implied a full refund policy, but in reality, consumers often received minimal credits for late deliveries.
- Hidden Membership Charges: Terms related to Instacart+ memberships were not clearly disclosed, leading to unauthorized charges for numerous users.
Settlement Terms and Conditions
Under the settlement’s terms, Instacart faces strict directives aimed at preventing future misconduct. The company must:
- Clearly disclose all costs associated with delivery services.
- Obtain informed consent from consumers regarding subscription charges.
The FTC’s Commission approved the final order with a unanimous vote of 2-0, reinforcing its commitment to protecting consumers from deceptive online practices.
Legal Oversight
The proposed order has been filed in the U.S. District Court for the Northern District of California. Once approved by the court, it will have the force of law, holding Instacart accountable for its actions.
