Instacart will pay $60 million to settle allegations by the Federal Trade Commission that it misled users with false advertising and deployed "unlawful subscription enrollment" practices.
The federal agency alleged that Instacart used deceptive tactics in its subscription signup and "satisfaction guarantee" advertising that caused consumers to pay more in fees, and prevented them from securing refunds.
For example, the FTC said Instacart falsely dangled promises of "free delivery" to consumers on their first order, while shoppers were still required to pay a mandatory service fee to get their groceries delivered.
The FTC also said that Instacart falsely advertised full refunds for users who had problems with their order.
"Instacart misled consumers by advertising free delivery services — and then charging consumers to have groceries delivered — and failing to disclose to consumers that signed up for a free trial that they would be automatically enrolled into its subscription program," Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in a statement.
In a blog post, Instacart acknowledged the FTC settlement but denied "any allegations of wrongdoing by the agency."