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Grubhub was ordered to pay $3.5 million in damages after the District of Columbia filed a lawsuit over the food delivery service’s alleged fraudulent practices.
On Friday, Washington, D.C., Attorney General Carl Racine announced the ruling against Grubhub “for imposing hidden fees on customers and using deceptive marketing techniques to increase profits in violation of district consumer protection laws.”
The District of Columbia sued Grubhub in March for alleged violations of the Consumer Protection Act and the district’s procedures.
Customers in the D.C. area will receive a collective $2.7 million, which Racine said “will be returned to affected customers.”
“Those with active Grubhub accounts will receive a refundable credit, and if the credit is not used within 90 days, the money will be sent to customers in the form of a check,” he said.
Lindsey Nicholson/UCG/Universal Images Group via Getty Images
In addition, the food delivery platform will have to pay $800,000 in civil penalties to the District of Columbia.
“Grubhub used every trick in the book to manipulate customers into paying far more than they owed, and even worse, they did it in the midst of a global pandemic when District residents were already struggling to make ends meet,” Racine said in statement.
He added, “Grubhub’s hidden fees and misleading marketing tactics are designed to get the company an extra dollar at the expense of D.C. residents — but we’re not letting them get away with it. No company, big or small, can take advantage of DC residents without consequences.”
As part of the agreement, GrubHub will be required to more clearly note the additional charges associated with your order.
“Settling this claim is in the best interest of our business and the matter has now been resolved,” the company said in a statement. “Grubhub is committed to supporting all restaurants and diners and is taking a number of steps to ensure price transparency.”
ABC News’ Beatrice Peterson contributed to this report.
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