Care.com to refund $8.5M to customers for its ‘deceptive’ practices, FTC says
By Jeanne Sahadi, CNN
(CNN) — The Federal Trade Commission said Monday that Care.com had agreed to a proposed $8.5 million settlement to address what the FTC called “unlawful practices,” which include misleading both the job seekers and job posters who use the site.
“Care.com used inflated job numbers and baseless earnings claims to lure caregivers onto its platform, and used deceptive design practices to trap consumers in subscriptions,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement released Monday afternoon. “The order announced today puts a stop to these unlawful practices, returns millions of dollars to consumers and helps ensure an honest marketplace for families looking for care and caregivers looking for work.”
Care.com offers to help consumers find caregivers for their children, family members with special needs, elderly parents and pets; as well as providers of housekeeping and tutoring services.
The FTC said the $8.5 million would be used to issue refunds to consumers harmed by the company’s alleged misleading practices. Among the other terms of the settlement, Care.com must only make earnings claims that are backed up with evidence; let consumers know before the company accepts their payment how communication on the site works; and make it simpler for users to cancel their subscriptions.
In response to the news of the settlement, Care.com directly challenged the FTC’s claims.
“Though Care.com was fully prepared to litigate this matter and confident in its position, we decided to enter into an agreement with the FTC to resolve it now and keep our focus on helping families and caregivers,” the Austin, Texas-based company said in a statement. “This settlement should in no way be construed as a validation of the FTC’s claims. We’ve been in business for nearly 20 years, and successfully connected millions of American families with caregivers. We … have always put (customers) first.”
Care.com specifically refuted, among other things, that it “manipulated optics, inflated statistics and attempted to trick our customers.” And, it added, the rate information on the site is “based solely on what families say they are willing to pay, which varies significantly.”
The FTC noted that its five-person board unanimously voted to file its complaint against the company and noted that it only does so “when it has ‘reason to believe’ that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest.”
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