The Federal Trade Commission (FTC) is taking action against gig work company Arise Virtual Solutions for misleading consumers about potential earnings on its platform and marketing its business opportunity without complying with the FTC’s Business Opportunity Rule. This rule includes the requirement to truthfully disclose the basis for earnings claims to consumers.
Under the proposed settlement, Arise would be required to pay $7 million, which will be refunded to consumers harmed by its misconduct. Additionally, the company must substantiate any future earnings claims.
“Arise lured in workers with false promises about what they could earn while requiring them to pay out-of-pocket for essential equipment, training, and other expenses,” said FTC Chair Lina M. Khan. “Operating in the ‘gig’ economy is no license for evading the law, and the FTC will continue using all its tools to protect Americans from unlawful business practice.”
The FTC's complaint charges that Arise used misleading advertisements claiming that consumers could earn “up to $18/hour” performing remote customer service work for major companies. The company heavily promoted this opportunity online, targeting stay-at-home mothers and others seeking work-from-home opportunities. Most of those recruited were Black women.
According to the complaint, when Arise began citing the $18/hour figure in 2020, internal documents showed that average pay was just $12/hour. From 2019 to 2022, 99.9% of those who joined made less than $18/hour in hourly base pay. Despite receiving a Notice of Penalty Offenses from the FTC regarding false earnings claims in 2022, Arise continued running these ads.
The complaint also alleges that Arise's earnings claims did not consider substantial fees consumers faced when joining and using its platform. Consumers were required to make hundreds of dollars in equipment purchases and until July 2022 were charged up to $250 for mandatory training programs.
Arise failed to provide documents and disclosures required by the FTC’s Business Opportunity Rule, marking this as the first case where a gig economy company has been charged under this rule.
Beyond startup costs, Arise also charged workers nearly $40 each month in mandatory fees, further reducing their effective earnings. When workers left after discovering insufficient pay compared to promises made by Arise, their expenses were not refunded.
In addition to paying $7 million, Arise will be permanently prohibited from making unsubstantiated earnings claims as part of the proposed settlement. The company will also be required to provide disclosures mandated by the Business Opportunity Rule.
The Commission vote authorizing staff to file the complaint and stipulated final order was unanimous at 5-0. The FTC filed these documents in U.S. District Court for the Southern District of Florida. Chair Lina M. Khan and Commissioners Melissa Holyoak and Andrew Ferguson issued statements.
Arise faces concurrent litigation with the U.S. Department of Labor over separate allegations of worker misclassification as independent contractors.
The FTC thanks various agencies including the U.S. Department of Labor and Better Business Bureau Serving Southeast Florida and Caribbean for their assistance with this matter.
Note: The Commission files a complaint when it has “reason to believe” that defendants are violating or are about to violate law and it appears that proceeding is in public interest. Stipulated final orders have force of law when approved by District Court judge.
Staff attorneys on this matter were James Davis, Nathan Nash, and Taylor Arana from FTC’s Midwest Region.
The Federal Trade Commission works to promote competition and protect consumers through education efforts on consumer topics available at consumer.ftc.gov.
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