Business Blog
HomeAdvisor’s $7.2 million proposed settlement with FTC hits home with small businesses, gig workers
It’s a match that should have been made in Home Improvement Heaven: consumers looking for service providers and service providers looking for new clients. But the FTC alleged in a 2022 complaint that Denver-based HomeAdvisor, Inc. – a company affiliated with Angi, formerly known as “Angie’s List” – used misleading tactics to sell home improvement project leads to many small businesses operating in the gig economy. A proposed settlement in the case includes $7.2 million for refunds.
HomeAdvisor recruits service providers – for example, contractors or lawn care businesses – to join its network for a typical annual fee of $287.99. Once they’re enrolled, HomeAdvisor sells them – for an additional fee – leads of people who supposedly have home repair or maintenance projects. As part of the membership package, many service providers have paid an additional $59.99 for an optional one-month subscription to a service called mHelpDesk, software for scheduling appointments and processing payments.
The FTC charged that HomeAdvisor made false or deceptive claims about the quality and source of its leads. For example, HomeAdvisor claimed that service providers will get leads matching their skills and in their preferred locale, but according to the complaint, many of them didn’t. In addition, the FTC says HomeAdvisor often told service providers that its leads result in jobs at rates much higher than the company could substantiate. Another allegedly deceptive practice: misrepresenting that the optional one-month mHelpDesk subscription was free.
In addition to the $7.2 million financial judgment, the proposed order prohibits HomeAdvisor from making false or misleading claims about leads and bars misleading “free” representations.
Once the proposed settlement is published in the Federal Register, the FTC will accept comments for 30 days. Information about refunds for service providers won’t be available until the settlement is final. Bookmark the FTC’s refund page and check back later for more information about eligibility.
What can businesses glean from the announcement? The proposed settlement reflects the FTC’s commitment to challenging unfair, deceptive, or anticompetitive practices in the gig economy, as articulated in its September 2022 Policy Statement on Enforcement Related to Gig Work. It also builds on other efforts to protect gig workers and small businesses, including the Notice of Penalty Offenses on Money-Marking Opportunities and the pending Advance Notice of Proposed Rulemaking on Earnings Claims.
It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.
Thank all of you at the Federal Trade Commission for your outstanding work on bringing to justice another company using deceptive methods in fooling the American people =Applause=
Are th victims of this company going to receive any of the $72 million?
To the ftc.gov administrator, Keep sharing your knowledge!
I used Angie to find a tile and grout cleaning company. The service provider was over 5 miles away and send that fact to pressure us to give a check to them and expect a written contract right after they returned to the office. Not only did they not send a contract to clarify services they ran from my home to my bank to cash the check, refuting the ability to refuse the proposed contract.
When we wrote those facts to Angie as allowed in their review policies of their cud, the bad review was removed from the site so that prospective customers could be warned and make an informed decision on whether or not to have the company give an estimate! To top it off the business owner called me to threaten that he had lawyers! I called Angie to learn that if the company refunded the ill gotten money, the bad review is taken dawn! So, wrongfully take money is ok, if after complaint you return the money, there is no cost to te business! Angie confirmed this procedure to me in a phone call!
Hi ftc.gov webmaster, You always provide great examples and case studies.
Thank you for addressing this company. I never got a lead that was for the business leads I signed up for. And paid them for ripping me off. Deceptive representation and misleading services
I am a professional who joined Home Advisor in 2016 in the hopes of getting work for my new small business. It has been a huge thorn in my side! Everything in the article is true - the leads are pushed through without being vetted, the fees change with each lead.
I joined Angie's List a couple of years ago with a one year contract and had to pay $300.00 a month for their services. I had over 30 leads in that year but only 2 jobs; I lost more money than I received and many of the jobs were wrong for my business.
In addition to paying the monthly fee, if leads were sent to Home Advisor via Angie's List as an Exact Match of my services, I also had to pay the Home Advisor lead fee.
These companies merged and were under the same umbrella but were double dipping. I left Angie's List at the end of my year and am on the brink of leaving Home Advisor.
What I find interesting is the recent change to the lead fees on my Home Advisor account. They are now paid by a "Corporate Contribution" yet I do not know why, what it means and how long it will last. Their Customer Service people are not aware of the reasons either.
My experience with both companies has been a huge annoyance. I stuck with Home Advisor because I knew what to expect. However, their practices have been getting worse and I am on the losing end.
Unfortunately the deceptive practices of Angi's Leads continue in 2023 and have grown from fake leads and enrollment lies to stealing whatever they can out of small business accounts. They have cleaned out my business accounts and somehow overdrew the business Quickbooks account 2500.00. They are devastating small businesses across the US and nothing is being done.