HomeAdvisor, a company affiliated with Angi, has been ordered to pay up to $7.2 million for using deceptive tactics to lure gig workers, according to the Federal Trade Commission. Image courtesy of HomeAdvisor
Jan. 23 (UPI) — HomeAdvisor, a company affiliated with Angi, has been ordered to pay up to $7.2 million for using deceptive tactics to lure gig workers, according to the Federal Trade Commission.
The FTC issued the proposed order Monday, requiring the Denver-based company to stop misleading home service providers and to refund defrauded gig workers and small businesses.
“Today’s order requires HomeAdvisor to refund home service providers millions of dollars and stop misleading them about the quality of its leads,” said Samuel Levine, Director of FTC’s Bureau of Consumer Protection. “Even as the nature of work and the economy change, the FTC will continue to combat dishonest commercial practices aimed at consumers, workers and small businesses.”
HomeAdvisor, which also operates as Angi Leads and HomeAdvisor Powered by Angi, recruits contractors and landscapers online for millions of homeowners and their maintenance and remodeling projects. Service providers pay an annual membership fee of $287.99, as well as an additional fee for each lead they are given.
Monday’s action against HomeAdvisor is the FTC’s first since the commission issued its Policy Statement on Enforcement Related to Gig Work in September to protect gig workers from unfair practices.
In March, the FTC charged HomeAdvisor with making false, misleading or unsubstantiated claims since 2014 about the quality of the leads it sells to service providers. The complaint also alleged that HomeAdvisor’s sales agents misrepresented the optional one-month mHelpDesk subscription for scheduling and payments as free.
“Gig economy platforms should not use false claims and phony opportunities to prey on workers and small businesses,” Levine said in a statement in March.
According to the complaint, HomeAdvisor told service providers that its leads resulted in actual home improvement jobs at higher rates than the company’s own data showed. The complaint also alleged that service providers often spent time following up on leads that did not pan out and were forced to spend even more time seeking refunds from the company.
In the redress program, the FTC has ordered HomeAdvisor to administer two separate funds. One fund would provide payments of up to $30 to service providers for misrepresenting leads. The second fund would make payments of up to $59.99 to any service providers who were told the first month of their mHelpDesk subscription was free.