Care.com reaches $8.5 million US FTC settlement over job listings, renewals
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 customersto 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.
Thesettlement 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
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
