Care.com Set To Dish Out $8.5M For ‘Unlawful Practices’ That Misled Customers

The online caregiving platform was accused by the FTC for having inflated numbers and deceptive subscription plans.

Care.com has accepted the Federal Trade Commission (FTC) proposal to pay an $8.5 million settlement for its “unlawful practices.”

According to the FTC, an online marketplace for caregiving services used exaggerated or “baseless” numbers to entice job seekers to join its site while also using misleading practices to keep members in the platform’s subscription plan. Care.com reportedly also inflated the number of jobs available on its website. The organization also proposed unconfirmed wages that job seekers could earn through these opportunities.

Additionally, Care.com allegedly encourages job seekers to purchase a subscription based on these numbers, promoting an abundance of jobs. However, the number of jobs listed would also include postings with “little to no chance” of hiring someone—moreover, the amount they could earn on average. While displayed on the website as between $13 and $14.25 an hour, the earnings were not tracked by Care.com at all.

The FTC released a statement on the settlement, claiming that the website’s marketing messages supported these untrue claims.

“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. “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.”

As for the auto-renewing subscriptions, Care.com allegedly locked users into paying for the platform before accessing job opportunities or caregivers. Both speakers and posters need a paid subscription before discussing the work opportunity. Moreover, they allegedly took displeased users through multiple obstacles in their efforts to cancel their plans.

After the federal investigation, the FTC issued a plan for Care.com to rectify its unlawful practices toward customers. Now, the $8.5 million will go back to those who fell victim to Care.com’s misleading business model.

With the financial settlement, Care.com can only make substantiated claims about earnings and jobs available. It must not include listings that most likely would not lead to actual employment. Furthermore, the website must be “upfront” about the communication requirements before customers start a subscription. Cancelation methods will also face fewer issues.