The Federal Trade Commission announced that it reached a settlement with HomeAdvisor, resolving allegations that the company used deceptive and misleading tactics to sell home improvement project leads to service providers. As part of the settlement, the company -- which is affiliated with Angi (formerly known as "Angie's List") -- agreed to pay up to $7.2 million.
By bringing this action, the FTC is signaling that it intends to use its resources not only to protect individual consumers, but also small businesses, including those operating in the gig economy. This action follows up the FTC's Policy Statement on Enforcement Related to Gig Work, which was issued late last year. In announcing the action, Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, said, "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."
According to the FTC, HomeAdvisor recruits service providers to join the company's network. Service providers pay an annual membership fee to join, and then pay separately for leads they receive from the company. The FTC alleged that HomeAdvisor made false claims about the leads that it will provide, including that service providers will only receive leads matching the types of services they provide and their preferred geographic area. The FTC also charged that HomeAdvisor misrepresented how often leads actually turn into paying customers. In addition, the FTC alleged that HomeAdvisor also misled customers about whether an optional one-month help desk subscription was free.
It's yet another big-dollar settlement from the FTC, which is something that all advertisers should be thinking about when judging the risks associated with their next advertising campaign. And, for advertisers in the B-to-B space who were thinking that the FTC isn't really watching what you're doing, it's time to think again.
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