Care.com to Return $8.5 Million to Users Due to Deceptive Business Strategies, Reveals FTC
Care.com was accused of enticing caregivers onto their platform with inflated job prospects and misleading income promises, as well as using underhanded methods to keep consumers tied into subscriptions, according to Samuel Levine, the director of the FTC's Bureau of Consumer Protection, in a statement issued on Monday afternoon. The ruling issued today puts an end to these unlawful practices, awards millions of dollars in refunds to affected consumers, and works towards fostering an honest marketplace for families seeking care and caregivers searching for employment.
Care.com provides a platform for families to find caregivers for their children, individuals with special needs, elderly parents, and pets, as well as home cleaning and tutoring services.
The $8.5 million settlement funds will be used to provide refunds to consumers who suffered financial harm due to the alleged deceptive practices of the company. As part of the settlement, Care.com is also required to substantiate any income claims, clearly inform consumers about communication procedures on the site before accepting payment, and simplify the process for canceling subscriptions.
Care.com challenged the FTC's allegations in response to the settlement news, stating that they were prepared to take the case to court but decided to settle the matter instead to prioritize assisting families and caregivers.
"We were fully prepared to litigate this matter and were confident in our position. However, we opted to conclude this agreement with the FTC to keep our focus on serving families and caregivers. This settlement in no way validates the FTC's claims. We have been in operation for nearly 20 years and have helped millions of American families connect with caregivers. Our customers have always been our top priority," Care.com stated in a statement.
The company firmly denies allegations of manipulating data, exaggerating figures, and attempting to mislead customers. The rate information on the site is based solely on what families are willing to pay, which can vary significantly.
The FTC's five-member board unanimously decided to file a complaint against the company, noting that they do so only "when we have 'reason to believe' that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest."
The settlement will not only provide refunds to affected consumers but also necessitates Care.com to provide evidence for any income claims made on their platform. In the business world, Care.com operates as a platform connecting families in need of various care services with suitable caregivers, tutors, and cleaners.
