Care.com reaches $8.5 million US FTC settlement over job listings, renewals (updated)

People Incorporated

26/08/2024 18:03

(Adds Care.com statement, settlement details, paragraphs 4,
10-11)
    By Jonathan Stempel
       Aug 26 (Reuters) - Care.com, a platform for providing
in-home care services to children, older adults and pets, agreed
to pay $8.5 million to settle U.S. Federal Trade Commission
charges it grossly inflated the number of available jobs and
made it difficult to cancel memberships.
    The settlement with the unit of IAC Inc  IAC.O  was filed on
Monday in the federal court in Austin, Texas, and requires a
judge's approval.
    It followed tens of thousands of complaints from Care.com
customers, including many who thought they canceled memberships
but were billed again. The $8.5 million will go toward refunds.
Care.com did not admit or deny wrongdoing in agreeing to settle.
    The FTC said Care.com enticed customers to buy auto-renewing
memberships by overstating the number of jobs, or "gigs," on its
platform and how much people could earn from them.
        It said Care.com knew or should have known a significant
number of the jobs were unlikely to result in employment.
    The FTC said Care.com then "frustrates" customers seeking to
cancel by using deceptive website designs, including a "Submit"
button that misleads them into believing they canceled, and a
"Cancel" button that actually stops the cancellation process.
    About 2.9 million U.S. consumers bought Care.com
auto-renewing memberships between January 2019 and March 2022.
    The settlement requires the Austin-based company to provide
a "simple mechanism" for avoiding unwanted renewals, and back up
employment claims on its website.
    "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," FTC
consumer protection chief Samuel Levine said. "The order
announced today puts a stop to these unlawful practices."
        In a statement, Care.com said it settled to keep its
focus on helping families and caregivers.
  
        It also said that as child and healthcare costs rise,
"it is disappointing that the FTC has chosen to attack trusted
businesses who are part of the solution."
  

 (Reporting by Jonathan Stempel in New York; Editing by Richard
Chang)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))