The Federal Trade Commission is sending out more than $23.8 million to Grubhub drivers and diners who the agency says were harmed by the food delivery company’s misleading earnings claims and other deceptive practices.

The agency announced Wednesday that 640,038 people will receive payments by check or PayPal. Affected app users will receive payments automatically without needing to fill out a form. Most recipients will get their payment by mail and should cash the check within 90 days. Those receiving money through PayPal will have 30 days to claim it, the FTC said.

In December 2024, the FTC and Illinois Attorney General jointly filed a lawsuit, along with a proposed $25 million settlement, over allegations that Grubhub used deceptive practices to grow its business.

Grubhub had long promoted a single, low-cost delivery fee, but regulators said it later added extra charges labeled as “service” or “small order” fees, sometimes pushing the final price to more than twice what customers initially saw. One former Grubhub executive reportedly described the pricing strategy as a “pricing shell game,” according to the FTC.

Beginning in at least 2019, Grubhub also allegedly listed restaurants on its platform without having agreements with them. The FTC said the practice made Grubhub’s network appear larger and sometimes resulted in orders being sent to restaurants that had not partnered with the company, creating headaches for both businesses and customers.

Some customers allegedly lost access to gift card funds after Grubhub locked accounts containing large balances. Customers were sometimes left without a clear explanation or an easy way to regain access to their money, according to the FTC.

Grubhub was accused of overstating how much drivers could earn. In New York City, for example, Grubhub allegedly advertised earnings of up to $40 an hour, even though the median driver earned about $10 an hour. However, just one in 1,000 drivers reached the advertised rate, according to the FTC.

Although Grubhub did not admit to wrongdoing, it agreed to settle the FTC’s case.

At the time of the company’s settlement, Grubhub said in a statement: “At Grubhub, we’re committed to transparency so that every single day diners, restaurants and drivers can make well-informed choices to do business with us. While we categorically deny the allegations made by the FTC, many of which are wrong, misleading or no longer applicable to our business, we believe settling this matter is in the best interest of Grubhub and allows us to move forward.”

Under the settlement, Grubhub agreed to make “substantial changes,” including being more upfront about driver pay, giving users a way to challenge blocked accounts and only listing restaurants that have agreed to be on the platform, the FTC said.

The Independent has contacted Grubhub for comment.