Grubhub FTC settlement and consumer refunds

The Federal Trade Commission (FTC) and the Illinois Attorney General have reached a settlement with Grubhub regarding allegations of deceptive advertising and unlawful business practices. The company was accused of misleading drivers about potential earnings, applying junk fees despite promising free or cheap deliveries, making it difficult to cancel subscriptions, and blocking diner accounts with large gift card balances without warning. Additionally, Grubhub allegedly listed restaurants on its platform without their consent.

As part of the enforcement action, Grubhub is required to implement changes to its business practices, including providing honest advertising regarding driver pay and establishing mechanisms for users to dispute blocked accounts.

The FTC has begun distributing over $23.8 million in settlement payments to approximately 640,038 drivers and diners. Payments are being issued via mail or PayPal, with individual amounts varying; reports indicate a median compensation of $51 in one instance and an average of approximately $37 in another.