The Federal Trade Commission (FTC) has taken action against Care.com, alleging that the company’s platform systematically deceived caregivers seeking jobs and failed to provide a simple way for families to cancel their paid memberships.
Care.com is an online platform that connects people seeking to hire workers for various jobs – such as child and older adult care, care for individuals with special needs and pet sitting – with those looking for work. To contact job posters or seekers, users must purchase an auto-renewing paid subscription.
According to a federal complaint, the FTC alleges that Care.com’s marketing statements about the number of jobs available on its site and the income workers could expect were deceptive.
Care.com has agreed to a settlement that mandates it to refund $8.5 million to customers who were harmed by its practices. Additionally, the company is required to substantiate its earnings claims and accurately represent the number of jobs available through its platform.
“Care.com used inflated job numbers and baseless earnings claims to lure caregivers onto its platform and used deceptive design practices to trap consumers into subscriptions,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “The order stops 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’s platform enables individuals seeking caregivers to sign up and post job listings at no cost. Job seekers, on the other hand, need to buy a subscription to apply for these jobs. However, in order for a job poster to view a worker’s application, both parties need to have paid memberships.
The complaint alleges that the company’s advertising often includes an inflated number of job openings on its platform, misleadingly counting positions for which there are minimal hiring prospects.
In addition to the exaggerated job claims, the complaint alleges that Care.com misled users about potential earnings when finding a job through the platform. The company advertised hourly and weekly earnings to attract consumers into paying for subscriptions, despite lacking substantial data to support these earnings claims.
Care.com has been accused of not tracking earnings for jobs found on its platform and lacking credible information to support its earning claims in its advertising and marketing. The complaint states that Care.com’s claims about earnings for specific types of work are based on an average of those jobs listed on its site. It does not track or know the actual pay rates negotiated between job seekers and job posters after they make contact off the site.
According to the complaint, Care.com continued these deceptive earnings claims even after receiving a Notice of Penalty Offenses related to earnings claims from the FTC in 2021.
It is also alleged that Care.com has used illegal tactics to prevent users from canceling subscriptions.
When customers attempt to cancel, they are required to navigate through several unrelated links to locate information on how to do so. After finding the cancellation details, customers encounter multiple steps intentionally designed to make it difficult for them to successfully cancel, the complaint claims.
Settlement requirements
Under the proposed settlement terms, Care.com will be obligated to:
- Refund $8.5 million to consumers who have been harmed by its practices.
- Only make earnings claims that are true and based on evidence.
- Only make claims about the number of jobs posted on the site by users who can hire a potential applicant.
- Be transparent with consumers about communication methods prior to payment.
- Ensure users are given a straightforward method to cancel subscriptions on the site.
In response to the FTC’s statement, Care.com issued a similar response contesting the claims.
“We would not be in business for long if we manipulated optics, inflated statistics and attempted to trick our customers,” the statement said. “We have found that many care seekers prefer to see a level of interest in their job post before committing to a premium membership, and our basic service tier offers this ‘try before you buy’ opportunity. This does not mean that there is little to no chance that a caregiver will be hired for these jobs. When a seeker sees the array of caregivers available, the commitment to a premium membership enables seekers to contact and hire caregivers. Moreover, the annual fee that caregivers pay while active on our platform is a screening fee, which helps maintain the safety of our community.”
The statement also discusses the accusations of inflated earnings data and challenges with the cancellation process. The company concluded with the following statement.
“Given the care crisis in America, we believe our collective energy as a country should be on solutions, not nitpicking attacks. Care.com intends to keep our focus on what matters: American families and the hardworking caregivers who support them.”
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