Doxo claims to offer bill payment transparency, but FTC calls foul

  • Doxo provides insights into mobile phone spending trends 
  • The online bill payment company is the subject of a Federal Trade Commission lawsuit
  • Doxo says the suit is a publicity stunt and it’s causing "incalculable harm" to the company

Doxo is touting a new report that reveals Americans are spending an average of $1,365 per year on their mobile phone services, up 2% from last year. But Doxo itself has landed in hot water with federal regulators for how it bills consumers.

Doxo is a small Seattle-based company that offers an all-in-one payment system through which consumers can pay their bills for everything from car loans and utilities to mobile phone services. Privately held, the company’s investors include Jeff Bezos; its co-founders are former executives of Qpass, a mobile content company acquired by Amdocs in 2006.

According to Doxo, more than 11 million users have paid tens of thousands of different billers using its platform. The system allows consumers to organize all their biller accounts, manage due dates and pay bills through a single site.

But it’s also been the subject of myriad complaints, including one filed by the Federal Trade Commission (FTC). In April, the FTC filed suit alleging that Doxo and two of its co-founders used misleading search ads and deceptive online practices to lure consumers into paying millions of dollars in junk fees that were tacked onto consumers’ bills.

According to the FTC, Doxo claims to have a network of billers that use its platform, but it has no direct relationship with the overwhelming majority of those billers. It allegedly uses “dark patterns” – online design tricks that manipulate consumers into taking unwanted actions – to dupe consumers into using its service by disguising itself as their billers’ official payment channel.

Tens of thousands of consumers have complained about Doxo’s deceptive practices, according to the complaint. Complaints with the Better Business Bureau certainly keep Doxo’s customer support team busy. In August, the Washington State Department of Transportation cautioned customers about using Doxo to pay their toll bills.

What Doxo says

Doxo contends that it has a direct relationship with thousands of billers across the country, and using its all-in-one bill pay service provides consumers numerous benefits versus what any single biller can offer.

“Doxo is dedicated to improving the all-in-one bill pay approach for consumers by providing new tools and technologies — such as Apple Pay and bank account linking — and given the high and growing number of repeat payers, it is resonating with consumers,” a Doxo spokesperson told Fierce via email.

The company on June 24 filed a motion to dismiss the FTC’s case, disputing each of the FTC’s claims and citing the company’s track record of more than 15 years in business. It also said that it fixed many problems the FTC flagged before filing its suit and that the publicity the FTC sought from filing its case is causing incalculable harm to Doxo.

“Far from the FTC’s misleading narrative, this is no fly-by-night scam,” Doxo’s lawyers told the U.S. District Court in the Western District of Washington. “The idea is to make paying bills less time-consuming, more certain, and an easier experience for customers.”

Of course, Doxo charges for its service. Sometimes, a $2.99 or $3.99 fee may apply for automated clearing house payments or a variable amount for card payments to cover interchange and delivery costs. If there is a fee for a payment with Doxo, that fee is clearly displayed at the time of checkout, the company’s spokesperson said.

The case remains pending in federal court in Seattle.

Mobile bills are climbing steadily

In case you’re wondering what Doxo is saying about mobile phone bills, it’s rather predictable — and remarkable at the same time. Mobile phone bills continue to increase steadily. Americans spend a whopping $180 billion annually on mobile phone services, according to Doxo.

Breaking it down further, households with a mobile phone bill spend $121 per month, which equates to $1,365 per year when averaging across all U.S. households.

mobile market size

Based on Doxo’s breakout by cities, the highest mobile phone bills are in New York, at $136 per month, followed by San Diego, at $135. Fort Lauderdale is No. 3, at $132, while El Paso and San Jose average $130 and $127, respectively.

cities Doxo

As for states, the highest phone bills are in Alaska, where monthly amounts average $156, but Vermont is a close second, at $155 per month. Delaware averages $149/month, while New Hampshire and Connecticut round out the top five at $145 and $142, respectively.

Doxo state spending

Last year, Hawaii was the state with the highest phone bill, but this year, it’s No. 10. Movements like that happen every year. Still, the same states generally stay in the top 10 in terms of most expensive, according to Liz Powell, senior director of Insights at Doxo.