FTC Charges HomeAdvisor with Deceiving Contractors

A recent administrative complaint from the FTC alleges that HomeAdvisor has been misleading its customers. HomeAdvisor says the complaint is without merit.

Earlier in March, the Federal Trade Commission (FTC) issued an administrative complaint against HomeAdvisor, Inc. claiming the company used “deceptive and misleading tactics” when selling leads on home improvement projects to service providers and small businesses.

The complaint alleges that HomeAdvisor, a company affiliated with Angi (formerly Angie’s List), knowingly misrepresented the quality of the leads it provided to its members.

“Since at least July 2014, HomeAdvisor, through its sales agents and marketing materials, has made representations to service providers about the quality, characteristics, and source of HomeAdvisor’s leads that are false, misleading, or unsubstantiated,” the complaint says.

“HomeAdvisor represents that its leads concern people who intend to hire a service provider soon, even though many of them do not.”

According to the FTC, HomeAdvisor deceived service providers by claiming its leads would land them home improvement jobs at higher rates than HomeAdvisor’s in-house data suggested. The FTC also claims that HomeAdvisor misled members regarding the cost of a subscription to an optional software platform.

“Gig economy platforms should not use false claims and phony opportunities to prey on workers and small businesses,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a press release. “Today’s administrative complaint against HomeAdvisor shows that the FTC will use every tool in its toolbox to combat dishonest commercial practices.”

An Angi spokesperson refuted the claims in the complaint, calling them “outrageous,” “meritless” and “out of touch.”

“The FTC allegations against HomeAdvisor are based on a false narrative using a small handful of cherry-picked, incomplete, and out-of-context recorded sales calls — to serve their agenda,” the spokesperson told FH in an email. “The reality is much different.”

According to Angi, HomeAdvisor has generated “tens of millions” of leads since 2014, with less than four percent resulting in a service provider requesting credit due to a task or location mismatch.

“Fraud and deception don’t work as business models,” the Angi spokesperson said. “If our pros don’t win, we don’t win.”

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