Care.com Agrees to $8.5 Million Settlement With FTC

Care.com Agrees to $8.5 Million Settlement With FTC

Introduction

Care.com, a platform offering in-home care services for children, older adults, and pets, has agreed to pay $8.5 million to settle charges from the U.S. Federal Trade Commission (FTC).

The FTC accused Care.com of significantly inflating the number of available jobs on its platform and making it difficult for customers to cancel their memberships. The settlement, which requires court approval, was filed in federal court in Austin, Texas.

The FTC's investigation was prompted by tens of thousands of complaints from Care.com customers, many of whom reported being billed even after they believed they had canceled their memberships. According to the FTC, Care.com misled customers into purchasing auto-renewing memberships by overstating the number of job opportunities and potential earnings on its platform, despite knowing that many of these jobs were unlikely to result in employment.

Additionally, the FTC accused Care.com of using deceptive website designs that complicated the cancellation process. For example, a "Submit" button misled users into thinking they had successfully canceled their memberships, while a "Cancel" button actually halted the cancellation process.

Approximately 2.9 million U.S. consumers purchased Care.com's auto-renewing memberships between January 2019 and March 2022. As part of the settlement, Care.com is required to implement a "simple mechanism" for avoiding unwanted renewals and to substantiate any employment claims made on its website.

In response to the settlement, Care.com stated that it settled the case to focus on helping families and caregivers. The company also expressed disappointment that the FTC chose to target businesses like theirs, especially as the costs of childcare and healthcare continue to rise. The $8.5 million will be used to provide refunds to affected customers.