PayByPhone Begins Charging for Parking Time Before A Payment Is Submitted, Class Action Lawsuit Claims

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PayByPhone US has been hit with a proposed class action lawsuit that alleges the cashless parking app misleads consumers by starting the time on parking meters before payment has been made, depriving users of the full allotted time for which they’ve paid.

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The 32-page false advertising lawsuit asserts that PayByPhone, which contracts with municipalities and private parking operators to provide a purportedly convenient way to accept parking reservations and payments online, operates “contrary to deeply ingrained consumer expectations” by failing to include a clear and conspicuous disclosure of its “unorthodox” practice of beginning the countdown clock on parking reservations before payment has been received.

Parking meters, the suit explains, typically operate under a “familiar model” in which the meter does not begin to count time until after payment has been remitted. Although payment methods may have changed over the years, the case says, consumers’ common understanding of how parking meters operate has not. Most consumers have no reason to believe a parking app will begin to count their time before the transaction is completed, because “that is not how traditional parking meters have ever worked,” the filing conveys.

The lawsuit states that PayByPhone’s “deceptive” interface and checkout process do not inform customers otherwise, nor do they display an accurate countdown timer indicating that the time has already begun. Instead, the page displays a misleading and static reference to the amount of time a consumer is attempting to purchase, the suit says.

“A reasonable user’s expectation at this stage in the process is that they are merely selecting their payment preferences, not that the 15 minutes they are considering to purchase have already started running—before they have even confirmed payment,” the case asserts.

The lawsuit further charges that “[t]he sleight of hand is so subtle that nobody can pick up on it until after the payment is made, if at all.”

The suit alleges that PayByPhone intentionally chooses not to provide consumers with clear and conspicuous notice of its unusual methods because the company stands to make significant money from service and convenience fees levied on purchases made through the app. Per the complaint, each transaction on the PayByPhone app includes a $0.35 service fee, ostensibly to cover operating costs.

The lawsuit contends that PayByPhone surreptitiously runs the timer on parking reservations to force consumers to purchase extra time and pay an additional $0.35 fee, essentially doubling its fee income.

Notably, PayByPhone’s user interface allows consumers to select a parking spot from anywhere in the world and provides no mechanism to verify that a user has parked before beginning the countdown clock, the lawsuit says. Furthermore, the case argues that consumers may spend longer than usual on the checkout screen for a multitude of reasons, such as searching for a specific spot within a broader parking zone, and that they should not be shortchanged on time as a result.

PayByPhone’s deceptive business practices have “real consequences” for consumers, the case stresses, including potential parking citations and economic harm from recurrent and unnecessary $0.35 service fees.

Had PayByPhone disclosed its highly unusual method of keeping time on parking reservations, consumers would not have proceeded with their transactions or would have taken steps to avoid the charge, like paying at a physical parking meter, the filing argues.

The PayByPhone class action lawsuit seeks to cover all individuals who paid for parking using the parking service’s mobile application within the past four years in California, Florida, Massachusetts and Washington, within the past three years in New Hampshire, and within the past six years in Pennsylvania.

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