(Bloomberg) -- FleetCor Technologies Inc. Chief Executive Officer Ron Clarke successfully pitched small businesses on “a better way to pay” for gas, making himself a billionaire in the process.

But that success was built in part on falsely advertised rebates, concealed transactions fees and a host of other unfair practices -- and Clarke knew it, a federal judge in Atlanta ruled this week in a case brought by the Federal Trade Commission.

Clarke and FleetCor have long been dogged by accusations of unethical nickel-and-diming. He has previously dismissed such complaints as “fake news,” but US District Judge Amy Totenberg found the FTC had presented “overwhelming evidence” of customer harm. She ruled against FleetCor without a trial and also found Clarke individually responsible.

“It is plain that Clarke had actual knowledge of FleetCor’s unlawful practices or, at the very least, that he was recklessly indifferent,” the judge wrote in her Aug. 9 order blocking the company from continuing such practices. She denied the FTC’s request for a damages though, citing a 2021 Supreme Court ruling barring the commission from suing for monetary relief.  

FleetCor said it plans to appeal Totenberg’s ruling. The company “takes governance and oversight matters seriously and is confident it has acted in accordance with applicable laws,” lead independent board member Steven Sull said in a statement. 

‘Pervasive’ Violations

A narrow niche in the digital-payments world, fuel cards like those offered by FleetCor are credit cards that companies with vehicle fleets can issue to employees for on-the-job purchases of gas and and other travel-related expenses. 

Totenberg said the FTC’s evidence showed that FleetCor engaged in “pervasive and long-lasting” violations aimed at deceiving customers. She noted that FleetCor’s ads made glowing promises that its cards carried no transaction or annual fees, but the actual terms-and-conditions contained a string of nebulous charges like “convenience network surcharge” or “minimum program administration fee” that often kicked in without prior notice.

The judge pointed out that FleetCor’s own internal documents stated that the most of its customers were small businesses that held fewer than 10 of its cards. A company study described them as “fairly unsophisticated” and “business owners not business people.” For many of them, “English was not their first language,” the study said.

Many of these customers simply didn’t have time to review documents “with a microscope, spend hours on the phone with customer service representatives trying to pay a bill on a system that does not function, or get a refund for an improper charge,” Totenberg wrote.

Though FleetCor had argued Clarke was not directly involved in such practices, the judge said internal documents clearly showed otherwise. She noted that he emailed FleetCor’s head of sales, Todd House, in 2017 and asked if FleetCor had any “mechanism that ‘forfeits customer discounts’” in case the price of fuel fell below a certain level.

“Fundamentally we have had minimal/no SMB rebates since beginning of 2015,” House replied to Clarke, abbreviating small and medium-sized businesses.

The ruling marks a rare moment in the spotlight for Clarke, a 60-something-year-old who rarely gives interviews and is little known outside the payments industry for anything but his lavish compensation.

Short Seller Derision

Clarke set out to consolidate the fragmented market for fuel card providers after becoming FleetCor CEO. The company has made dozens of acquisitions in the US and abroad under his leadership. It posted $2.8 billion in revenue last year. And Clarke, thanks to years of generous grants of stock options, has amassed a $1.1 billion fortune, according to the Bloomberg Billionaires Index.

But the complaints about excessive fees attracted attention on Wall Street long before Totenberg’s ruling. Short seller Andrew Left of Citron Research derided FleetCor’s business practices as predatory, and some shareholders have also expressed concern.

Though the the Supreme Court limited the ability of the FTC to sue for monetary relief, Chair Lina Khan has said she believes the commission can seek damages in consumer cases under alternative proceedings. Representatives for the FTC didn’t immediately respond to requests for comment if they would continue to seek monetary relief in the FleetCor case.

The case is Federal Trade Commission v. FleetCor Technologies Inc., US District Court for the Northern District of Georgia (Atlanta).

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