DC AG Racine Fines Instacart Over Allegedly Misleading Consumers About Fees

Bernard Nash
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  • District of Columbia AG Karl Racine settled a lawsuit with online delivery service Instacart to resolve allegations that Instacart misled customers in the District regarding service fees and failed to remit taxes on those fees in violation of the District of Columbia Consumer Protection Procedures Act and the District’s sales tax law.
  • According to the 2020 Complaint, the AG’s office alleged that between September 2016 and April 2018, Instacart misrepresented the nature of a service fee added to their online orders which, while being characterized as a tip to the individual shoppers who fulfilled the order, in fact was simply additional revenue for Instacart. Additionally, the AG’s office found that Instacart failed to collect and pay sales tax on the revenue it received from service and delivery fees in the District between 2014 and 2020.
  • Under the terms of the Consent Order, Instacart will pay $1.8 million to the District, release $739,000 in disputed sales taxes paid under protest, as well as comply with District law in ceasing to post misleading information about fees, tips or charges.
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