Tired of getting false leads from HomeAdvisor? You aren’t alone. The Federal Trade Commission (FTC) is taking action against the home services tech platform, after investigation into the growing complaints of deceptive lead practices. With hefty penalties and a vow to stop the shady business tactics, the FTC is sending a very clear message – false advertising won’t be tolerated.
Table of Contents
- 1. “HomeAdvisor’s False Promises Uncovered: FTC Slams Down the Gavel on Misleading Lead Claims”
- 2. ”Caught in the Act: FTC Exposes HomeAdvisor’s Deceptive Practices, Levies Heavy Fines”
- 3. “False Hope, Real Consequences: FTC Holds HomeAdvisor Accountable for Misleading Consumers”
- 4. “Penalties Imposed: How HomeAdvisor’s False Lead Claims Resulted in FTC’s Punitive Measures
1. ”HomeAdvisor’s False Promises Uncovered: FTC Slams Down the Gavel on Misleading Lead Claims”
When the FTC recently launched an investigation into HomeAdvisor’s deceptive lead-generation claims, the company had to answer for its missteps. The allegations? The site was selling leads that weren’t just outdated, they were outright false & deceptive. For example, some of the leads falsely claimed to be from customers looking to hire handymen, plumbers, electricians, and other service pros.
On top of providing false leads, HomeAdvisor has been guilty of overpromising on their service. When it comes to promises of guaranteed jobs they delivered far less than they promised. Consumers were duped into signing up for job leads only to discover that no jobs were available. Not only did consumers feel cheated, but they also had to pay for leads that they never got.
- False Leads
HomeAdvisor was found to be selling outdated and false leads.
HomeAdvisor was overpromising on the jobs they promised customers.
2. “Caught in the Act: FTC Exposes HomeAdvisor’s Deceptive Practices, Levies Heavy Fines”
HomeAdvisor, the home services website, was caught by the Federal Trade Commission (FTC) for deceiving consumers into believing that their contractors were carefully screened. Instead, contractors were allowed on the platform even without the necessary background checks and weren’t properly screened like HomeAdvisor claimed.
The FTC didn’t take kindly to HomeAdvisor’s deceptive practices. Heavy fines were levied on the website for the fraud and consumers were refunded the fees they paid to the website. In addition, HomeAdvisor was ordered to revamp its screening process and install an updated system that would make sure that only legitimate, qualified contractors would be listed. They also have to regularly submit compliance reports to the FTC.
- The FTC imposed heavy fines on HomeAdvisor.
- HomeAdvisor must update its screening process for contractors.
- The website must submit compliance reports to the FTC.
3. “False Hope, Real Consequences: FTC Holds HomeAdvisor Accountable for Misleading Consumers”
Many people have dreamed of the ideal life, a perfect home they can escape to from the bustle of the city. But all too often, hope for a harmonious and prosperous life in the suburbs is dashed by one experience – hiring an unreliable contractor.
Recently, the Federal Trade Commission (FTC) took action against HomeAdvisor after finding they had misled consumers in the process of selecting contractors. HomeAdvisor and their affiliated websites, promised consumers only “background checked” and “screened and approved” contractors would be displayed on their search results. However, this promise was found to be false, giving consumers a wrong impression of the contractors they were considering.
- The FTC imposed a civil penalty of $12 million dollars on HomeAdvisor for making those false promises to consumers. They were also required to truthfully inform customers of their contractor screening process and use trustworthy criteria when selecting contractors for their search results.
- The same penalty and constraints now also apply to their affiliate websites, such as Angie’s List and Porch.com, making sure that customers shopping for contractors can make informed decisions and trust the contractors they choose.
4. ”Penalties Imposed: How HomeAdvisor’s False Lead Claims Resulted in FTC’s Punitive Measures
Unauthorized Claims Lead to Severe Penalties
It is no surprise when fraudulent organizations and activities find their way eventually to the desk of the Federal Trade Commission (FTC). HomeAdvisor was one such organization that was at the receiving end of severe penalties for its illegal practices. In 2016, the company was accused of sending false leads to unsuspected customers through phone calls, emails, and texts.
The FTC certainly took swift action and imposed on HomeAdvisor significant restrictions. It took no more than a few months for the federal agency to levy over-the-top penalties against the home services giant. The greatest and immediate consequence of the action was that HomeAdvisor was forced to pay a hefty fine of $1.9 million. Additionally, the company was required to:
- Cancel any outstanding profits that it might have earned through false leads
- Adhere to stricter rules for identifying their fake leads
- Take all necessary measures to remain transparent in regards to similar accusations and punishments in the future.
HomeAdvisor also faced an FTC order which ordered the company to be more vigilant about delivering its services only after confirming the customer’s technical specifications. The FTC also banned the company from ‘unjustly’ charging customers, who could not have benefited from the service. This, in particular, withheld the company from charging some customers based on false promises.
Q: What did the FTC do to HomeAdvisor?
A: The Federal Trade Commission (FTC) issued a cease-and-desist order against HomeAdvisor, requiring them to pay $12 million in penalties for falsely representing the lead quality of its services.
Q: What did HomeAdvisor do wrong?
A: According to the FTC, HomeAdvisor made unsubstantiated claims that its service generated high-quality home service leads for businesses, such as contractors and remodelers, when those business were actually getting leads of lesser quality.
Q: Why did the FTC issue penalties to HomeAdvisor?
A:The FTC issued the penalties in order to deter companies from making false lead claims, and by doing so, to protect consumers. The goal of the FTC is to ensure that consumers receive truthful advertising from any company they interact with.
Q: How much did HomeAdvisor pay in penalties?
A: In total, HomeAdvisor had to pay $12 million in penalties to the FTC for its false lead claims.
By taking swift, decisive action against HomeAdvisor, the FTC has shown that no company is above the law. From the people who run large multi-national corporations to homeowners and small business owners alike, false claims about products are unacceptable and will not be tolerated. Hopefully, the FTC’s legal precedent will help create a better, more accountable market for consumers.