Rebate Platform Upside Reneged on Referral Program Promises, Class Action Alleges

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A proposed class action claims Upside Services, Inc. has misled consumers with regard to the benefits of its referral program.

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The 34-page lawsuit says that for years the company relied on consumers to promote its gas rebate service—which offers cash back every time a user fills up at a participating fuel retailer—incentivizing customers to make referrals with the promise of lifetime payments when those they referred used Upside’s platform. However, in “true cloak-and-dagger fashion,” the company changed the payment terms of its referral program in late 2021, tightly restricting the use of referral codes and denying referring customers the benefits they were previously guaranteed, the suit alleges.

Despite its pledge to pay consumers for life for users they had referred to the platform, Upside “renege[d] on that promise,” depriving customers who had “catapult[ed] the company to success” of the lifetime benefits to which they are entitled, the case contends.

Prior to December 2021, whenever an Upside user successfully referred another consumer to the platform, which is offered online or via the Upside app, the referring individual would receive a bonus—typically between half a cent and two cents—for each gallon of gas the new customer pumped, the complaint explains.

The defendant “aggressively” promoted this referral program to consumers and encouraged them to disseminate their referral codes—which a new customer could use to access the service—across social media and through the use of bumper stickers and referral cards, the filing shares.

Relying on the promise of continued referral benefits, content creators and website owners like the plaintiff—a certified public accountant who frequently promoted Upside on his YouTube channel and personal finance website—invested time and money into marketing the service across their platforms, the lawsuit claims. The suit adds that the plaintiff’s Upside-related content alone led hundreds of thousands of viewers to learn more about the platform.

However, in November 2021, Upside modified its terms, restricting the program to apply only to referrals made to friends and family members and introducing a new “affiliate program,” which users could join if they wanted to promote the platform to the general public, the case relays.

As of December 1, 2021, Upside has stopped issuing payments for past referrals if it believes they were not made to personal acquaintances, the complaint says. The same day, the company also stopped paying consumers for new referrals if it determined that these users should instead qualify for the affiliate program, the filing states.

Though Upside purports to have deactivated all referral codes in December of that year, the lawsuit alleges that the codes are, in fact, still active. As such, the defendant continues to benefit from any referrals made through users’ pre-existing promotional content, for which the original creators are no longer compensated, the suit claims.

The case contends that most referring customers were never notified by Upside about the changes to its terms regarding the referral program.

“Upside also never contacted these referring consumers to inform them that, contrary to its representations, it had not deactivated their referral codes, or that the company was continuing to enjoy the benefit of these consumers’ content,” the complaint adds.

Further, Upside continues to allow these codes to be disseminated, generating new customers “without correcting their false understandings about how the referral program works,” the filing charges.

“Upside could rectify this with a pop-up disclaimer whenever a user enters an older referral code, or it could—as it said it would—simply disable these codes,” the lawsuit relays. “But the reality is that Upside wants to continue benefitting from new user signups, regardless of whether the users are signing up under false pretenses.”

The suit alleges that Upside, despite knowing the older referral codes are connected with false promises that users will be provided with ongoing referral benefits, continues to host pages on its website that encourage consumers to advertise their codes to the public.

As a result, customers who relied on the defendant’s promises and marketed its platform at their own expense have been deprived of the benefits to which they are entitled, the case claims.

The lawsuit looks to represent anyone in California who made referrals to Upside pursuant to its lifetime referral program during the applicable statute of limitations period.

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