WASHINGTON, D.C. — In a significant move to uphold consumer protection standards, the Federal Trade Commission (FTC) recently filed a complaint against Care.com, accusing the prominent gig platform of misleading both caregivers seeking employment and families looking for services. The allegations focus on deceptive claims about job availability and potential earnings, as well as obstructive subscription cancellation processes.
The FTC’s complaint, filed in the U.S. District Court for the Western District of Texas, outlines a series of misleading marketing strategies employed by Care.com. According to the complaint, the platform vastly overstated the number of available jobs and presented inflated earnings projections to entice caregivers into purchasing paid subscriptions. These claims, the FTC asserts, were not substantiated by any credible data, thus violating consumer trust.
Since at least 2019, Care.com has been accused of advertising millions of job opportunities, including those with negligible hiring potential. This approach misled caregivers into subscribing to the platform under false pretenses. The FTC highlighted specific instances, such as a 2021 ad campaign that promised childcare jobs starting at $18 per hour, while the platform’s internal data suggested average rates were significantly lower.
Further complicating matters for consumers, Care.com allegedly employed “dark patterns” to discourage subscription cancellations. Users reportedly faced a convoluted process involving multiple steps and misleading prompts designed to dissuade them from canceling their subscriptions. This stands in stark contrast to the simple two-step cancellation process available for free memberships.
In response to these allegations, Care.com has agreed to a settlement with the FTC. The company will pay $8.5 million, which will be used to refund affected consumers. Additionally, Care.com is required to substantiate any future earnings claims and ensure transparency about job availability. The platform must also simplify its cancellation process to avoid further consumer frustration.
FTC’s Director of the Bureau of Consumer Protection, Samuel Levine, underscored the importance of this action, stating, “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.” The settlement aims to restore honesty in the marketplace, benefiting both job seekers and families seeking care services.
The Commission’s unanimous 5-0 vote provides decisive action and serves as a reminder to digital platforms about the importance of maintaining integrity and transparency in their operations. As the gig economy continues to expand, regulatory bodies like the FTC play a crucial role in ensuring that consumers are not misled by inflated claims and obstructive business practices.
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