HomeAdvisor reached a settlement with the U.S. Federal Trade Commission (FTC) over allegedly deceptive tactics used by HomeAdvisor to sell potential customers by making unsubstantiated claims about the quality of leads it sold to home improvement professionals.
The Federal Trade Commission (FTC) is a federal agency charged with protecting and educating consumers, as well as promoting competition.
It protects consumers from unfair business practices, including in this case home service providers who were allegedly misled by HomeAdvisor.
HomeAdvisor False and misleading claims
The Federal Trade Commission (FTC) reached a settlement with HomeAdvisor, an affiliate of Angi (formerly Angie’s List), in which the company was accused of making false claims about the potential customers it sold.
One announcement noted that the deceptive practices had been ongoing since at least 2014.
HomeAdvisor is a home improvement recommendation website that provides information and ratings on home improvement companies.
Website users rate companies and provide in-depth reviews on specific web pages of each contractor serving communities across the United States.
The HomeAdvisor website makes money by selling leads to businesses listed on the site.
Screenshot of HomeAdvisor’s main sales page from March 14, 2016, courtesy of the Internet Archive
FTC alleges false and misleading claims by HomeAdvisor
The FTC’s complaint alleged that HomeAdvisor misled home contractors about the leads they were selling.
According to the FTC:
“The FTC’s March 2022 administrative complaint against HomeAdvisor charged that, at least since mid-2014, it had made false, misleading, or unsubstantiated claims about the quality and origin of the leads the company sold to providers of services that potential customers are looking for.
The complaint also alleged that HomeAdvisor often told service providers that its benefits lead to jobs at much higher rates than it can prove.
Finally, the complaint alleged that HomeAdvisor sales agents misrepresented that the optional one-month subscription to mHelpDesk was free.
The FTC order to pay defrauded home improvement service providers was made in January 2023 and was recently approved by the FTC in April 2023.
The FTC’s original January 2023 order referred to HomeAdvisor’s practices as deceptive.
The FTC press release announced:
“Today’s order requires HomeAdvisor to refund millions of dollars to home service providers and stop misleading them about the quality of their potential customers,” said Samuel Levine, director of the Bureau of Consumer Protection from the FTC. “Even as the nature of work and the economy change, the FTC will continue to fight unfair business practices that target consumers, workers and small businesses.”
The approved order requires HomeAdvisor to pay $7.2 million to service providers who were “defrauded.”
It also requires HomeAdvisor to stop making false claims about its leads, specifically that the leads are from people who are willing to hire service providers or who have submitted an application directly to HomeAdvisor.
Read the FTC’s official press release on the order approval:
Featured image by Shutterstock/Csaba Peterdi
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