Uber Class Action Claims Automatic Payments Violate Federal Law

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A class action lawsuit claims Uber’s automatic payments violate federal law by taking unauthorized recurring electronic debits from customers’ accounts.

Plaintiff Janette Iniguez of California alleges that beginning in April 2016, defendant Uber Technologies Inc. started drawing recurring payments out of her bank account. These Uber automatic payments continued for several months, she says.

All the while, Iniguez claims she never gave the company a written and signed authorization for these Uber automatic payments.

Neither did Uber offer her a copy of any written authorization for these automatic payments, she says.

Uber is well known for producing a smartphone app that connects registered Uber drivers with potential customers who need a ride. The app handles payment for the ride by charging the passenger’s credit or debit card.

Iniguez now claims Uber has been initiating similar recurring automatic payments in “multiple instances” with an entire Class of customers, all without first getting a signed or similarly authenticated authorization.

She alleges Uber never requested such authorization before it initiated these automatic payments; and without having received any such authorization, the company certainly did not provide Class Members with a written copy, she claims.

Iniguez argues this practice violates the federal Electronic Funds Transfer Act, or EFTA. According to her Uber automatic payments class action lawsuit, the EFTA requires that a preauthorized electronic transfer of funds out of a consumer’s bank account must be authorized by the consumer in advance.

This requirement applies to series of electronic fund transfers that are authorized in advance to recur at substantially regular intervals. Federal regulations provide that whoever obtains that authorization must also provide the consumer with a copy of that authorization, Iniguez says.

The Federal Reserve Board’s Official Staff Commentary on the relevant regulations says that “[t]he authorization process should evidence the consumer’s identity and assent to the authorization.”

In describing what makes for a valid authorization, the board says that “[a]n authorization is valid if it is readily identifiable as such and the terms of the preauthorized transfer are clear and readily understandable.”

Iniguez claims Uber never provided any such authorization to her or to any potential Class Member but instead simply started debiting their accounts on a regular basis.

Iniguez is proposing to represent a plaintiff Class consisting of all persons in the U.S. whose bank accounts were subject to Uber automatic payments that were never authorized in signed writing within one year prior to the filing of this action. She expects these Class Members will number in the hundreds and possibly in the thousands.

She seeks certification of her proposed Class and appointment of herself as Class Representative. Iniguez is asking the court for awards of actual damages and EFTA statutory damages of $1,000 per Class Member. She is also asking the court to award court costs, attorneys’ fees, and prejudgment interest.

The plaintiff is represented by attorneys Todd M. Friedman, Adrian R. Bacon and Meghan E. George of the Law Offices of Todd M. Friedman PC.

The Uber Automatic Payments Class Action Lawsuit is Janette Iniguez v. Uber Technologies Inc., Case No. 3:16-cv-06126, in the U.S. District Court for the Northern District of California.