The Federal Trade Commission is taking action against Care.com (Care), alleging that the child and older adult care gig platform has systematically deceived caregivers who were looking for jobs while failing to give families seeking care a simple way to cancel their paid memberships.
In a federal court complaint, the FTC alleges that Care’s marketing messages about both the number of jobs available on their site and the amount workers could expect to be paid were deceptive.
Care has agreed to a settlement that will require it to turn over $8.5 million to be used to refund consumers harmed by their practices, as well as requiring the company to be able to back up the earnings claims it makes and be honest about the number of jobs available on their site.
“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.”
Care provides an online platform where people looking to hire workers for jobs like child and older adult care, care for people with special needs, and pet sitting can post jobs and where people looking for such work can contact potential employers. In order to contact job posters or job seekers, users are required to purchase an auto-renewing paid subscription.
Misleading Messages
According to the complaint, Care’s deceptive advertising entices consumers to buy subscriptions in order to apply for jobs. The deception has taken on two forms – vastly overstating the number of jobs available on the platform and making unsubstantiated claims about how much consumers could expect to earn through these jobs.
Care’s advertising frequently has included the number of jobs available on its platform—a number that is deceptively inflated by including jobs for which there is little to no chance a job seeker could be hired. Since at least 2019, Care has advertised millions of these jobs in an effort to entice care providers to pay for subscriptions to its platform, according to the complaint.
Care’s platform allows those looking for workers to join the site for free. When they answer a questionnaire, Care creates a job listing on its platform, but the only way for a job poster to see a worker’s job application is if both people have paid memberships; if the poster hasn’t purchased a paid membership, then there is no way they can hire someone who applies for their job. The lawsuit points to numerous complaints from consumers who expressed frustration at the number of jobs they applied for without hearing anything back.
In addition to the inflated job claims, the complaint also charges that Care deceived users about how much money consumers can earn when they get a job on the platform. In advertisements and landing pages, Care has touted hourly as well as weekly earnings totals that are designed to entice consumers into paying for subscriptions despite having little to no data to back up such earnings claims, according to the complaint.
The complaint cites one 2021 Care ad campaign on a third-party site saying “Childcare jobs from $18/hr,” while at the same time saying on its own website that, “On average, the national pay rate for babysitting jobs” and “The average rate for babysitters on Care.com” was between $13 and $14.25 per hour.
According to the complaint, Care has not actually tracked earnings for jobs found on its platform and has little to no credible information to back up its earning claims in its advertising and marketing. Care’s claims about earnings for specific types of work are based on an average of those specific types of jobs listed on its site, and Care does not track or know the actual pay rates negotiated between job seekers and job posters after they make contact off the site.
According to the complaint, Care continued these deceptive earnings claims even after receiving a Notice of Penalty Offenses related to earnings claims from the FTC in 2021.
Cancellation Interference
The complaint also alleges that Care has used a number of unlawful tactics, sometimes referred to as dark patterns, to prevent consumers – both job posters and job seekers – from being able to cancel their subscriptions.
When consumers try to cancel Care subscriptions, they must click through a number of unrelated links to find information about how to cancel. According to the lawsuit, consumers regularly complained about difficulties in finding the cancellation options, with many resorting to searching online for instructions on how to cancel.
Once consumers find their way to the cancellation “flow” for their paid subscription, they face multiple steps designed to impede them from successfully cancelling. In some cases, consumers run into multi-page questionnaires, confusing language, warnings about the effects of cancellation, and offers to buy other paid memberships before finally being able to successfully cancel. Care makes it much more difficult to cancel a paid subscription than a free subscription, which is a relatively simple two-step process, according to the complaint.
Settlement Requirements
Under the terms of the proposed settlement, Care will be required to:
- Turn over $8.5 million to the FTC to be used to provide refunds to consumers harmed by Care’s unlawful practices.
- Only make earnings claims that are true and that Care has evidence to back up.
- Only make claims about the number of jobs available on the site that are posted by users who can actually hire a potential worker.
- Be upfront with consumers about how communication on the site works before taking consumers’ money.
- Provide users with a simple cancellation method for any negative option subscriptions available on the site.
The Commission vote authorizing the staff to file the complaint and stipulated order was 5-0. The FTC filed the complaint and stipulated order in the U.S. District Court for the Western District of Texas. Commissioner Rebecca Kelly Slaughter issued a statement.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.
The staff attorneys on this matter are Edward Hynes and Erica Hilliard of the FTC’s Southwest Region.
