The Federal Trade Commission today issued a proposed order requiring HomeAdvisor, Inc. based in Denver. - Angie's Affiliate, formerly known as "Angie's List" - would pay up to $7.2 million for using various deceptive and misleading sales tactics. the home improvement project brings in service providers, including small businesses that operate in the "gig" economy.

Their adminsitrative order also enjoins HomeAdvisor from participating in the fraud described in the commission's complaint against the company, which allegedly took place over several years, and creates two compensation funds to provide money to defrauded contractors.

The administrative order is subject to public comment, after which the commission decides to terminate the order. "Today's order requires HomeAdvisor to return millions of dollars to home service providers and stop misleading them about the quality of their leads," said Samuel Levine, director of the FTC's Office of Consumer Protection. "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."

Today's action is the first announced since the commission issued a policy statement on gig enforcement that directed the agency to root out unfair, deceptive or anti-competitive practices in the gig economy. It builds on other efforts to protect gig workers and small businesses, including the Commission's Notice on Money Laundering Fines and ANPR's Income Requirements. HomeAdvisor, also known as Angi Leads and HomeAdvisor Powered by Angi, recruits service providers such as general contractors and lawn care companies to join the company's network. When service providers join the network, HomeAdvisor sells them leads that help service providers connect with potential cleints for home repair and maintenance. Service providers who join the HomeAdvisor network typically pay an annual membership fee of $287.99, then again for each lead received.

The FTC's March 2022 administrative complaint against HomeAdvisor charged that since at least mid-201 , the company has made false, misleading, or unsubstantiated claims about the quality and source of leads it sells to prospecting service providers. For example, the complaint alleged that while HomeAdvisor claimed that service providers only receive leads that match the services they offer and their primary geographic area, many of them do not. The complaint also alleged that HomeAdvisor often tells service providers that its leads lead to jobs that are much higher than it can prove. Finally, the complaint alleged that HomeAdvisor sales representatives provided an optional one-month subscription to mHelpDesk for free. In addition to requiring HomeAdvisor to pay up to $7.2 million in restitution, the proposed order prohibits the company from making false or misleading claims about its leads, including people seeking to hire a service provider or who have applied for a home. services directly to HomeAdvisor. It also prevents HomeAdvisor from misrepresenting its products as free when they are not, or making unsubstantiated claims about how quickly its leads turn into paid work. The existing compensation program would administer two separate funds. The first would pay up to $30 to bidders affected by HomeAdvisor's misinformation about lead quality. Another would pay up to $59.99 for service providers who were told the first month of their HelpDesk subscription was free.​

https://www.ftc.gov/news-events/news...me-improvement