The Federal Trade Commission (FTC) has initiated action against Care.com, alleging that the care gig platform deceived caregivers about job availability and wages while complicating the process for families to cancel their paid memberships.
In a federal court complaint, the FTC asserts that Care.com's marketing messages regarding the number of jobs available on their site and the expected earnings for workers were misleading.
Care.com has agreed to a settlement requiring it to pay $8.5 million, which will be used to refund affected consumers. The company must also substantiate its earnings claims and provide accurate information about job availability on its platform.
“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.com offers an online platform where individuals can post jobs related to child care, older adult care, special needs care, and pet sitting. Users must purchase an auto-renewing paid subscription to contact potential employers or job seekers.
According to the complaint, Care.com's advertising exaggerated the number of available jobs by including listings with little chance of hire. Since at least 2019, Care.com has advertised millions of such jobs. Additionally, users reported frustration over applying for numerous jobs without receiving responses due to unpaid memberships on both sides.
The FTC also charges that Care.com misled users about potential earnings. Advertisements claimed high hourly rates without sufficient data backing these figures. For instance, one 2021 ad campaign stated “Childcare jobs from $18/hr,” while the company's website indicated average babysitting rates between $13 and $14.25 per hour.
Furthermore, Care.com allegedly continued these deceptive earnings claims even after receiving a Notice of Penalty Offenses from the FTC in 2021.
The complaint also highlights difficulties faced by users attempting to cancel their subscriptions due to obstructive tactics known as dark patterns. Consumers often had to navigate through multiple unrelated links and steps before successfully canceling their subscriptions.
Under the proposed settlement terms:
- Care.com will pay $8.5 million for consumer refunds.
- Earnings claims must be truthful and substantiated.
- Job availability claims must reflect postings from users who can actually hire workers.
- Communication processes on the site must be transparent before taking consumers’ money.
- A simple cancellation method must be provided for any negative option subscriptions.
The Commission voted 5-0 in favor of filing the complaint and stipulated order in U.S. District Court for the Western District of Texas. Commissioner Rebecca Kelly Slaughter issued a statement regarding this matter.
FTC staff attorneys Edward Hynes and Erica Hilliard are handling this case.
The Federal Trade Commission aims to promote competition and protect consumers through education and enforcement actions against fraudulent practices.
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